INTENDED USE PLAN CLEAN WATER STATE REVOLVING ... - kia… Use Plans/2018 CWSRF... · 1...

INTENDED USE PLAN

CLEAN WATER STATE REVOLVING FUND

State Fiscal Year 2018

COMMONWEALTH OF KENTUCKY

PREPARED BY THE

KENTUCKY INFRASTRUCTURE AUTHORITY &

ENERGY AND ENVIRONMENT CABINET

Amanda.Yeary

Sticky Note

Revised to include 2017 capitalization grant figures under the Additional Subsidization paragraph on pg. 2.

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TABLE OF CONTENTS Introduction ...................................................................................................................................................... 1

What is the Clean Water State Revolving Fund (CWSRF) ....................................................................... 1 Eligibility .................................................................................................................................................. 2 Significant Federal Requirements ............................................................................................................. 2

Davis-Bacon Compliance .................................................................................................................. 2 Additional Subsidization ................................................................................................................... 2 Green Project Reserve ....................................................................................................................... 3 American Iron and Steel .................................................................................................................... 3 Fiscal Sustainability Planning ........................................................................................................... 3 Cost and Effectiveness ...................................................................................................................... 3

Structure of the DWSRF in Kentucky ...................................................................................................... 4 Clean Water State Revolving Fund Goals ...................................................................................................... 4 Short-Term Goals .................................................................................................................................. 5 Long-Term Goals .................................................................................................................................. 5 Criteria for Project Selection .......................................................................................................................... 6 Fund Administration and Operation .............................................................................................................. 7

Invitation Process ...................................................................................................................................... 7 Bypass Process Prior to Loan Commitment ...................................................................................... 8 Bypass Process Post Loan Commitment ........................................................................................... 8 Funding Limits and Large Project Financing .................................................................................... 9 Planning and Design Loans ............................................................................................................... 9 Addition of New Projects to the Project Priority List ........................................................................ 9 Emergency Projects ........................................................................................................................... 9 Refinancing ....................................................................................................................................... 9

Financial Terms of Loans ......................................................................................................................... 10 Interest Rates ..................................................................................................................................... 10 Repayment Terms ............................................................................................................................. 10 Loan Servicing Fees .......................................................................................................................... 10 Borrower Loan Compliance and Financial Monitoring ..................................................................... 11 Fund Transfers between the CWSRF and the DWSRF ..................................................................... 11

Funds Available to be Committed and Disbursed ......................................................................................... 12 Public Participation.......................................................................................................................................... 13 Appendices:

Appendix A: Comprehensive Project Priority List Appendix B: Call for Projects Letter Appendix C: Priority System Guidance Document Appendix D: Green Reserve Guidance Appendix E: Public Comments

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INTRODUCTION

The Intended Use Plan (IUP) is a document the Kentucky Infrastructure Authority (KIA) prepares for the U.S. Environmental Protection Agency (EPA) and others interested in Kentucky’s Clean Water State Revolving Fund Program (CWSRF, the Fund). The IUP is prepared in accordance with Title VI of the Clean Water Act (CWA) and the Consolidated and Further Continuing Appropriations Act, 2017 (April 28, 2017). The purpose of the IUP is to communicate Kentucky’s CWSRF plan for state fiscal year 2018 to potential borrowers from the Fund, the state’s public wastewater systems, the public, the Environmental Protection Agency (EPA), and other interested parties. The IUP also includes the Priority System Guidance Document, which is the set of criteria used to score and rank projects. An annual IUP is required by Title VI of the Clean Water Act (CWA) and is an integral part of the process to request the Federal Fiscal Year (FFY) 2017 Capitalization Grant. The IUP will identify how the funds available to Kentucky’s CWSRF will be used during each state fiscal year (SFY) to support the goals of the CWSRF. The 2018 IUP includes:

1. A description of the short and long term goals of the Fund; 2. The criteria and methods established for selecting projects; 3. Administration and operation policies of the Fund; 4. The public participation process; 5. The sources and uses of available funds; and 6. The Project Priority List - a list of eligible projects whose sponsors expressed

interest in low interest rate loans from the CWSRF. What is the Clean Water State Revolving Fund? The CWSRF is a national program by which EPA provides grants to states to further the goals of the CWA. The national CWSRF was created in 1988, to establish a water pollution control revolving fund that would provide financial assistance for construction of publicly owned treatment works under section 212 of the CWA, implementation of watershed management plans under section 319 of the CWA, and development and implementation of conservation and management plans under section 320 of the CWA. The general intent of Title VI of the CWA is to ensure that each state’s fund is designed and operated to provide financial assistance for water pollution control activities in perpetuity. The Water Resources Reform and Development Act (WRRDA) amended Titles I, II, V, and VI of the CWA. The EPA implements the national CWSRF program in such a manner that preserves for states a high degree of flexibility to operate their programs in accordance with each state’s unique needs and circumstances. Kentucky’s CWSRF financing program provides low interest loans for infrastructure projects that promote the goals of the CWA. Projects identified to receive funding are selected from the ranked group of Project Profiles submitted during an Annual Call for Projects. The ranking is based on the water pollution control criteria outlined in the CWA. The Fund is administered by KIA while the Kentucky Energy and Environment Cabinet (EEC) through the Division of Water (DOW) perform environmental and technical reviews on projects that seek assistance from the CWSRF. Since its inception in 1988, Kentucky’s CWSRF has committed funds to 347 wastewater infrastructure projects, totaling more than $1.4 billion (through June, 2017).

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Eligibility An eligible borrower must be a public wastewater system that is also a governmental agency, as defined in KRS 224A.011. Some examples include:

• Municipal corporations • Cities • Agencies • Commissions • Authorities • Districts

Examples of eligible projects include:

• Planning, design and construction of wastewater or stormwater collection, conveyance, and treatment facilities.

• The implementation of nonpoint source pollution control management programs. • Purchase of another wastewater system eligible under 33 U.S.C. 1383(d).

Significant Federal Requirements

Davis-Bacon Compliance Federal labor laws regarding prevailing wages, hours of work, and rates of pay shall apply to construction carried out in whole or in part with assistance from CWSRFs. These requirements are collectively known as the Davis-Bacon laws. All CWSRF funded projects will be required to comply with Davis-Bacon laws and incorporate their provisions into any project work that has been or will be contracted. For more information on Davis Bacon laws, please visit: http://www.dol.gov/whd/regs/compliance/whdfs66.pdf

Additional Subsidization

The principal forgiveness provision of the FFY 2017 grant required that at least 10 percent, or $1,687,400, and not more than 30 percent, or $5,062,200 be made available to provide additional subsidization to eligible applicants. The State will make such additional subsidization in the form of loans with principal forgiveness based on the system’s median household income (MHI). Fifty percent of the loan amount, up to a maximum of $1.3 million per borrower, may be offered as principal forgiveness to projects that qualify for the lowest non-standard interest rate. Principal forgiveness will not be provided on loan increase requests that result from scope changes, specification changes, or bid variations. In an effort to protect public health and provide assistance to small wastewater systems and package treatment plants serving disadvantaged communities, KIA will work with DOW to identify such systems and will provide critical funding that will allow these systems to become sustainable through consolidation and regionalization. The Authority has allocated $500,000 in subsidy from the FFY 2017

http://www.dol.gov/whd/regs/compliance/whdfs66.pdf

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Capitalization Grant to provide 95 percent principal forgiveness loans for this purpose. If these funds are not utilized during the 2018 funding cycle, KIA may retain the funds in the CWSRF program or provide additional principal forgiveness to eligible projects.

Green Project Reserve KIA will identify projects that address green infrastructure, water or energy efficiency improvements or

other environmentally innovative activities in the 2018 Project Priority List and fund an amount at least equal to 10 percent of the FFY 2017 capitalization grant.

American Iron and Steel (AIS)

The Consolidated and Further Continuing Appropriations Act of 2017 requires the use of American Iron and Steel (AIS) products in all CWSRF projects. Implementation guidance can be found at the link below: https://www.epa.gov/cwsrf/state-revolving-fund-american-iron-and-steel-ais-requirement.

Fiscal Sustainability Plan Section 603(d)(1)(E) requires that a loan recipient develop and implement a fiscal sustainability plan that includes 1) an inventory of critical assets that are a part of the treatment works; 2) an evaluation of the condition and performance of inventoried assets or asset groupings; 3) a certification that the recipient has evaluated and will be implementing water and energy conservation efforts as part of the plan; and 4) a plan for maintaining, repairing, and, as necessary, replacing the treatment works and a plan for funding such activities. The recipient may also certify that they have developed and implemented a plan that meets the forgoing requirements.

Cost and Effectiveness In accordance with Section 602(b)(13) of the Clean Water Act, as amended: “… the recipient of such assistance (must) certify, in a manner determined by the Governor of the State, that the recipient has studied and evaluated the cost and effectiveness of the processes, materials, techniques, and technologies for carrying out the proposed project or activity for which assistance is sought under this title; and has selected, to the maximum extent practicable, a project or activity that maximizes the potential for efficient water use, reuse, recapture, and conservation, and energy conservation, taking into account the cost of constructing the project or activity, the cost of operating and maintaining the project or activity over the life of the project or activity, and the cost of replacing the project or activity.”

https://www.epa.gov/cwsrf/state-revolving-fund-american-iron-and-steel-ais-requirement

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Structure of the CWSRF Program in Kentucky KIA and the DOW jointly administer the program via a Memorandum of Agreement in accordance with Kentucky Revised Statute (KRS) 224A.111 and Kentucky Administrative Regulation (KAR) 200 KAR 17:0501. The following contacts can assist with CWSRF inquiries:

Contact Agency Subject Ashley Adams (502) 573-0260 [email protected]

KIA Loan Application, Financial Terms, Interest Rates, General Information

Jocelyn Gross (502) 573-0260 [email protected]

KIA Project Profile Submittal

Jory Becker (502) 782-6887 [email protected]

DOW Request for Proposals (RFPs), Asset Management, Package Treatment Plants

Russell Neal (502) 782-7026 [email protected]

DOW CW Priority List, Environmental Review, Regional Facility Plans

Buddy Griffin (502) 564-3410 [email protected]

DOW Procurement, Bidding Requirements

CLEAN WATER STATE REVOLVING FUND GOALS

The Sustainable Infrastructure Initiative The combination of aging water and wastewater infrastructure, growing population, and declining investments in the area of water pollution abatement is forcing states and local governments to explore innovative methods for funding future water and wastewater capital projects. The EPA collaborated with external stakeholders and developed the Sustainable Infrastructure (SI) Initiative with a goal to reduce the funding gap between projected investment needs and current spending levels at the federal and local levels so the public can continue to enjoy safe drinking water and adequate sanitary service. Kentucky is working to provide knowledge and tools to ensure that the investments made in our water infrastructure to move us toward a more sustainable footing. The goal can be achieved through strong infrastructure planning and management practices. Some of the key areas for action are:

• Asset Management - A management framework that ensures the right investments are made at the right time.

1 KRS Ch 224A.111 and 200 KAR 17:050 may be found on the Internet from the Kentucky Legislature Home Page address: http://lrc.ky.gov/home.htm.

mailto:[email protected]





http://water.epa.gov/infrastructure/sustain/asset_management.cfm

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• Water & Energy Efficiency - Ensuring that water sector systems adopt sustainable practices and technologies for improving their efficiency, reducing costs and addressing future needs.

• Infrastructure Financing & the Price of Water Services - Options to pay for water infrastructure needs.

• Alternative Technologies & Assessment - Using the best, newest and innovative solutions when investing in water infrastructure.

Short-Term Goals Goal #1: Enhance loan closing procedures and refine repayment terms. Goal #2: Promote the principles of EPA’s Sustainable Infrastructure (SI) Initiative to loan recipients

through education and outreach so that SI practices are considered in planning, design, and construction activities.

Goal #3: Expand the use of the fund by soliciting nonpoint source projects to address some of the

state’s high-priority water quality problems, such as nutrient impairments caused by agricultural runoff.

Goal #4: Improve SRF training to borrowers, project administrators, Area Development Districts,

and the engineering community. Goal #5: Identify distressed borrowers through compliance monitoring and provide targeted

financial and managerial guidance. Goal #6: Develop a focused marketing strategy in conjunction with EEC to target systems with

compliance and energy efficiency needs. Goal #7: Work toward the use of electronic forms and data as opposed to paper documents, where

possible.

Long-Term Goals Goal #1: Work with the EEC to explore solutions to increase energy efficiency for clean water utilities

and future non-compliance issues under the CWA. Goal #2: Streamline loan processes and improve communication and the sharing of data between KIA

and DOW. Goal #3 Create a utility portal within the Water Resources Information System (WRIS) to improve

communication and reporting between the utility, KIA, and regulatory agencies. Goal #4: Participate in planning for small wastewater package treatment plant elimination and

regionalization.

http://water.epa.gov/infrastructure/sustain/waterefficiency.cfm

http://water.epa.gov/infrastructure/sustain/financing_priceofwater.cfm

http://water.epa.gov/infrastructure/sustain/alttech.cfm

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CRITERIA FOR PROJECT SELECTION

Project Priority List The CWSRF was established to fund projects and activities whose primary goal is the protection of water quality. In 1996, EPA issued the funding framework, which encouraged all states that fund both point and nonpoint source projects to integrate their planning and priority ranking systems, so that CWSRF funds can most effectively target the nation’s highest water quality problems. Following the EPA’s recommendation, Kentucky developed the Priority System Guidance Document (Appendix C), designed to equally evaluate publicly owned treatment works, storm water, and nonpoint source projects according to water quality based criteria developed by the Kentucky Division of Water. During the Call for Projects, which began October 14, 2016 and ended December 16, 2016, KIA and DOW invited all eligible borrowers to submit CWSRF project information via the WRIS. An official press release through the Governor’s Office, along with an email distribution was sent to all sewer utilities, area development districts, mayors, county judges executive, and the engineering community. A sample of the Call for Projects email is attached in Appendix B. Designated projects submitted via the WRIS during the Call for Projects process were considered for funding and placement on the Project Priority List. Projects were evaluated and assigned a score based upon the ranking criteria in the Priority System Guidance Document. In the event of a tie, the following factors were utilized to priority rank each project: (1) service of a small system as defined by population; (2) projects with existing enforcement actions (i.e. Agreed Orders, Consent Decrees); (3) water quality impacts and (4) financial need as evidenced by the median household income of the applicant. More information on tie breakers can be found in the priority ranking guidance attached in Appendix C. The 2018 Project Priority List (Appendix A) shows that Kentucky has sufficient eligible projects to meet the binding commitment requirements of the FFY 2017 Capitalization Grant. A brief description of the following fields will be helpful in reviewing the list.

Rank: Rank of project on the comprehensive Project Priority List. Score: Total number of points the project received using the ranking criteria in Appendix C. Loan Number: Priority list tracking number for project. This is the assigned loan number for the project throughout the process and should be referred to on all correspondence regarding the project. Applicant: Name of applicant identified on the Project Profile Form or the community in which the project is associated. Loan Package Title: Short description of project components (may include multiple WRIS numbers). Requested Loan Amount: Amount of desired SRF loan identified on the Project Profile Form. Invited Loan Amount: The amount of CWSRF funds that KIA has allocated to the proposed project. If this field lists a dollar amount greater than zero, then the project is invited for funding.

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Principal Forgiveness Amount: Estimated amount of principal forgiveness that a project is eligible to receive if sufficient principal forgiveness is available. GPR Amount: Amount of desired SRF loan identified that may qualify as green infrastructure. Green Category: Identified numerically as to which category identified green infrastructure components are classified (1 – Green Infrastructure, 2 – Water Efficiency, 3 – Energy Efficiency, 4 – Environmentally Innovative). WRIS #: The WRIS number is assigned by an Area Water Management Council after a project has received endorsement by a regional planning group. Information stored in the WRIS database includes geographic information system (GIS) data, information on water resources, and drinking and wastewater facilities. It is used by different entities and provides much of the information needed for all aspects of water resource planning.

The 2019 IUP process will begin in October 2017. The annual Call for Projects will be open from October to December 2017 during which time projects will be accepted for ranking in the SFY 2019 funding cycle. An applicant must submit a request for each project to be ranked for the 2019 cycle even if it was included on a previous year’s Project Priority List. The following tentative schedule will apply:

2019 Call for Projects October 2, 2017 - December 13, 2017 Creation of Project Priority List January 2, 2018 - March 30, 2018 Public Notice Period for IUP May 1, 2018 - June 1, 2018 Finalize 2019 IUP and send to EPA Prior to June 30, 2018

Email notifications will be sent in September 2017 to all sewer utilities, area development districts, mayors, county judge executives, economic development directors, and the Kentucky Society of Professional Engineers announcing the Call for Projects.

FUND ADMINISTRATION AND OPERATION

Invitation Process

Although developing and maintaining a priority list is required by the CWA, states are not required to select the highest ranked projects in any given year for funding. However, due to limited funding availability, Kentucky will fund projects based on priority ranking. Projects are vetted and many variables are considered prior to disbursement of loan invitations. Projects that don’t demonstrate readiness or have current audits (2014, 2015, 2016) may be bypassed. For all others, a letter of invitation to submit a loan application is emailed to applicants and provides instructions to electronically accept or decline the invitation through KIA’s website. Applicants that do not submit a loan application, complete with Kentucky e-Clearinghouse comments, by the deadline, may also be bypassed (see Bypass Process Prior to Loan Commitment below) and subsequent eligible project(s) will receive invitations. This process will continue until all estimated available funds have been allocated.

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If upon receipt of the loan application, the project scope differs significantly from what was scored in the ranked project profile, KIA reserves the right to have the project reassessed by DOW. Changes in project scope can potentially impact funding eligibility. Upon receipt of a complete loan application, KIA staff will review the information and prepare a credit analysis. A loan request will be presented to the KIA Board for financial review and conditional approval for each qualifying applicant. Upon KIA Board approval, a Conditional Commitment Letter will assure that funding will remain committed to the project for a period established in the letter, provided all of the conditions of the letter are met. If, during the loan commitment period, an unforeseeable circumstance arises that causes delay in the construction progress, beyond the current funding cycle, the project may be bypassed to the following funding cycle (see Bypass Process Post Loan Commitment below). Actual project funding amounts may vary from amounts presented in the Project Priority List due to updated cost estimates and funding received from other sources. Increases to existing loans must be approved prior to the date of initiation of operation. The application invitation process is designed to commit available funds as soon as possible with limited invitation iterations. Given an uncertain invitation acceptance rate, KIA will invite significantly more project dollars than are available to fund. If more projects than anticipated accept an invitation to apply it is possible that presentation of an invited project or projects to the KIA Board will be delayed until later in the year, will not be funded, or will be invited to apply for other KIA loan programs. If this situation occurs we will communicate with individual borrowers as expeditiously as possible.

Bypass Process Prior to Loan Commitment

A high-priority project that does not demonstrate capacity or is not ready to proceed within the given timeframe will be bypassed. A bypassed project will become ineligible for CWSRF funding in the current funding year and must reapply through the annual Call for Projects process to be re-ranked for future funding cycles. Some examples that justify a bypass include, but are not limited to the following:

• Incomplete or unavailable audits • Borrower does not demonstrate readiness based upon project schedule • Non-compliance or delinquent payment on an existing KIA loan • Incomplete loan application • Applicant unresponsiveness • Applicant cannot establish a dedicated source of revenue for the repayment of the loan.

Bypass Process Post Loan Commitment All CWSRF program requirements must be met by the term outlined in the Conditional Commitment Letter. An extension of up to six months for approved applicants that experience extenuating circumstances may be granted. For borrowers that experience extenuating circumstances that cause delay beyond the loan commitment period in the funding cycle in which the commitment expires, the project funding may be bypassed in order to provide loan funds for other projects. The loan commitment may resume in the following funding cycle.

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Funding Limits and Large Project Financing

Kentucky’s CWSRF does not have a limit on the amount of funds that will be made available to any one borrower from a specific capitalization grant. However, limits may be imposed on borrowers that have outstanding loan balances or loan commitments that increase the concentration risk for the total loan portfolio. Prior to 2016, after initial approval, a project would be required to be re-ranked and invited to apply during subsequent years if the borrower wished to pursue incremental funding or large project financing. This requirement was discontinued beginning in 2016. After a project is initially funded by KIA, it may receive priority funding from each available funding source, during subsequent funding cycles, based on funding limits and the original project budget amount. This will minimize the uncertainty of some borrowers about the future availability of additional project funds. If a project was eligible to receive principal forgiveness during its initial funding year, it will continue to be eligible to receive principal forgiveness in future years based on the parameters that are in effect for that funding year.

Planning and Design Loans

KIA recognizes that larger or particularly complex projects may require a lengthy planning and design process and thus may not be ready for construction within the allotted twelve months after the conditional commitment letter is issued or perhaps even with a six month extension period. For ranked projects that require funding for planning and design, before funding is available to draw (under a construction loan), KIA will encourage the applicant to apply for a Planning and Design loan rather than a full construction loan. The standard interest rate will apply during the five year term of the loan. However, if the applicant initiates construction within a prescribed time frame after approval of plans and specifications for the project, the loan can be converted to a construction loan with the interest rate that the applicant would otherwise qualify for and the term established in the Conditional Commitment Letter. Planning and Design loan borrowers will receive a priority funding position to apply for a construction loan in a subsequent year’s Intended Use Plan, based upon project readiness. Subsequent construction loans will be subject to interest rates and principal forgiveness amounts for the funding cycle in which the construction loan is approved by the KIA board.

Addition of New Projects to the Project Priority List

The Project Priority List may be amended during the year to add eligible projects. Major revisions to the IUP require public notice.

Emergency Projects

The Project Priority List may be amended during the year for declarations of emergencies designated by the Governor or the Secretary of the Energy and Environment Cabinet. An emergency project might involve an unanticipated failure requiring immediate attention to protect public health. The emergency project must meet all eligibility and loan requirements, but the additional public review and comment requirement may be waived. The EPA must approve these deviations.

Refinancing

KIA is willing to accept governmental agency requests to refinance non-KIA loans. Refinancing projects will be considered by KIA only when all the following criteria are met:

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1. There are sufficient funds available in the CWSRF to meet all other identified project needs for the program year;

2. The applicant can show significant savings as a result of the refinancing;

3. The applicant can identify an environmental problem within their jurisdiction that they are willing to immediately address with the savings achieved through the refinancing; and

4. Projects must meet all the applicable program requirements.

Financial Terms of Loans Interest Rates

The KIA Board must establish interest rates at least annually. Rates are based on prevailing market conditions with the 20 Bond General Obligation (GO) index as a reference rate. The current standard rate is 2.75 percent with two non-standard rates of 1.75 percent and 0.50 percent. These rates were approved by the KIA board on July 6, 2017, and are subject to change. Interest rate MHI Threshold Loan Type 2.75 > or = $43,740 Construction 1.75 $34,993 - $43,739 Construction 0.50 < or = $34,992 Construction 2.75 NA Planning and Design

Income surveys are permitted for all CWSRF eligible projects and must be completed 90 days prior to board presentation. The survey is applicable to the project service area only and an 80 percent response rate is required. Borrowers must use the standardized survey form located on KIA’s website and must be current within two years. KIA staff must be notified immediately upon invitation if a survey will be conducted. Survey results will not affect principal forgiveness allocation, only interest rate adjustment.

Repayment Terms

Planning, design, and sanitary sewer evaluation study (SSES) loans will be amortized over, but not to exceed, five years. If the planning and design loan is rolled into a CWSRF construction loan, the term for the planning and design amount will convert to the term approved for the construction loan. Construction loans will have a standard 20 year repayment term. At the KIA Board’s discretion, the repayment term for a construction loan for a service area that is eligible for the lowest non-standard rate may be extended to 30 years, but not beyond the expected design life of the project.

Principal and interest payments on each loan will commence no later than the date specified in the Assistance Agreement.

Loan Servicing Fees

A loan servicing fee of 0.2 percent on the outstanding loan balance will be charged as a part of each semi-annual loan payment in accordance with 200 KAR 17:050, Section 12. The fee is assessed to

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recover administrative expenses incurred over the life of the loan. These fees are accounted for outside of the program fund and will be used for necessary CWSRF program expenses.

Borrower Loan Compliance and Financial Monitoring

The borrower’s ability to repay its loans has a direct effect on the financial condition of the CWSRF. Additionally, maintaining a positive operating cash flow and capital asset reserve funding program will protect both the utility and its customers financially against unforeseen capital replacements in the future. Upon acceptance of a loan each borrower agrees to a number of post closing conditions, some of which are noted below, to remain in compliance with the terms of the loan.

a) If more than $750,000 of Federal funds is disbursed during any one (borrower) fiscal

year, the borrower is required to have a single or program-specific audit conducted for that year in accordance with OMB Circular A-133.

b) The borrower must provide audited financial statements to KIA within six months of the

entity’s fiscal year end date. KIA will review each borrower’s financial performance and, if necessary, will work with them to identify ways to remedy any non-compliance issues.

c) Borrowers are required to fund a repair and replacement reserve account equal to 5 percent of the KIA loan amount over 20 years and maintained for the life of the loan. This requirement may be waived if a documented replacement program is in place and being actively funded at a level that is acceptable to KIA.

Fund Transfers between the CWSRF and the DWSRF

Transfers between the SRF programs are allowed up to a maximum of 33 percent of the total Drinking Water State Revolving Fund (DWSRF) capitalization grants received. KIA reserves the right to transfer the maximum allowable 33 percent of uncommitted repayment funds from the CWSRF to the DWSRF repayment fund as loan demand arises. This decision will be evaluated annually by KIA and DOW. These funds will be distributed using the same criteria and method as described in the governing IUP. Funds not transferred within one fiscal year of receipt of a capitalization grant award shall be reserved for transfer in future years.

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FUNDS AVAILABLE TO BE COMMITTED AND DISBURSED

Kentucky’s CWSRF is capitalized by appropriations from the U.S. Congress and the Kentucky General Assembly. The Fund provides, in perpetuity, financial assistance to Kentucky’s eligible CWSRF projects. As of June 30, 2016 the CWSRF had net assets of $718,953,000 and 222 active loans. During 2018, Kentucky will rely on funding as outlined in Table A to provide financial assistance and to support the operations of KIA and DOW.

Table A Kentucky CWSRF Sources and Uses of Funds for 2018

July 1, 2017 through June 30, 2018

Federal State Funding Sources Contribution Contribution Other Total

Loan Repayments (P&I)

54,013,160 54,013,160 Interest Earnings (from cash on hand)

350,000 350,000

Banked Prior Year Administration Funds

745,000 745,000 FFY 2017 Capitalization Grant 16,874,000 3,374,800

20,248,800

Total Funding Sources 16,874,000 3,374,800 55,108,160 75,356,960

Funding Uses Financial Assistance 16,199,040 3,374,800 30,426,160 50,000,000

Leverage Bond Debt Service

23,937,000 23,937,000 Banked Prior Year Administration Funds

745,000 745,000

FFY 2017 Administration (4%) 674,960

674,960

Total Funding Uses 16,874,000 3,374,800 55,108,160 75,356,960 During the 2017 funding cycle KIA will have an estimated $50,000,000 available to fund eligible CWSRF projects. This is comprised of the FFY 2017 capitalization grant of $16,874,000, state match funds of $3,374,800, estimated loan repayments of $54,013,160 and interest earnings of $350,000 on existing cash balances. Funding is reduced by leverage bond debt service of $23,937000 and $674,960 used by KIA and DOW to administer the CWSRF program. Any administration funds that are not used or are transferred into the construction account will be reserved for use in a future year. KIA and DOW will have $745,000 in banked administrative funds from prior capitalization grants for administration of the program. The $3,401,800 state match will consist of proceeds from the sale of tax-exempt revenue bonds with debt service provided by the Commonwealth. If additional capitalization grant funding is made available, the required 20 percent state match will be provided to the full extent of the available capitalization grant. The anticipated submission date for the 2017 capitalization grant application is July 31, 2017, with the grant award and the entire cap grant amount being made available on October 1, 2017. The estimated federal to state cash draw ratio for the CWSRF for fiscal 2016 is 83:17.

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KIA received budgetary authorization to issue agency leverage bonds during the 2016-2018 biennium in an amount not to exceed $100 million. Additionally, authorization for $100 million that was granted during the 2014-2016 biennium was reauthorized. Bond proceeds are deposited into the fund and used to make eligible CWSRF loans. For this authorization to become effective, KIA must obtain approval from the Kentucky Infrastructure Authority Board, the Capital Projects and Bond Oversight Committee, the Office of the State Budget Director and the Office of Financial Management in the Finance and Administration Cabinet with respect to the timing and amount of the leverage bond issuance. KIA may elect to defer issuance of bonds or to not commit the entire authorization amount.

PUBLIC PARTICIPATION

The draft 2018 CWSRF IUP including the Project Priority List was made available for public review and comment on the KIA website at www.kia.ky.gov and the Division of Water website at www.water.ky.gov from June 14, 2017 through July 14, 2017. A public meeting was held on Friday, July 7, 1:00 p.m., EST, at the office of the Kentucky Infrastructure Authority, 1024 Capital Center Drive, Ste. 340. Written comments were accepted during the review and comment period and are summarized in the Final IUP, Appendix E.

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APPENDIX A

COMPREHENSIVE PROJECT PRIORITY LIST

Rank Score Loan Number Applicant Loan Package Title DOW Project Description

Total Project

Costs

Requested Loan

Amount

Utility

Service Area

MHI Population Green Amount

Green

Category WRIS #

* * A15-026Lexington-Fayette Urban County

Government

West Hickman WWTP Wet Weather Storage

Tanks - Phase 1SSO Correction $ 71,303,742 $ 35,303,742 $ 49,812 286,776 $ 137,106 4 SX21067048

1 ** A18-001 Prestonsburg, City ofPCUC: Big Sandy Regional Waste Water

Treatment PlantWWTP Expansion 8,944,498 8,344,498 24,435 7,680 0 SX21071007

2 ** A18-002 Louisa, City of City of Louisa I & I Rehab Project Sewer Rehabilitation 4,000,000 3,643,940 28,087 3,433 4,300,000 SX21127030

3 ** A18-003 Marion, City ofCity of Marion - New Wastewater Treatment

PlantNew WWTP 11,547,600 10,960,400 29,068 3,175 0 SX21055006

4 ** A18-004Hopkinsville Water Environment

Authority

HWEA SRF Phase VIII - Expand Hammond-Wood

WWTP & InterceptorWWTP Expansion 39,324,000 5,000,000 35,533 42,973 0 SX21047028

5 ** A18-005 Regional Water Resource Agency Ravines Sewer Upgrade CSO Correction 4,595,262 4,180,262 41,810 72,417 300,000 SX21059027

6 320 A18-006 Georgetown, City ofGeorgetown/Scott County South Sewer

ExtensionSewer Extension 3,350,000 2,275,000 59,864 31,845 325,000 3 SX21209012

7 245 A18-007 Regional Water Resource Agency Cedar Hills Subdivision Sewer Extension Project Sewer Extension 2,047,000 2,047,000 70,307 373 225,000 3 SX21059054

8 240 A18-008 Lancaster, City of Lancaster WWTP Rehab Project WWTP Rehabilitation 2,372,600 1,000,000 30,170 3,992 0 SX21079019

9 234 A18-009 Augusta Regional Sewer Authority Augusta/Brooksville Regional Sewer Project New WWTP 12,397,000 5,297,000 61,000 2, 3, 4 SX21023005

10 225 A18-010 Oldham County Environmental Authority I/I Program Sewer Rehabilitation 2,000,000 2,000,000 94,170 19,621 2,000,000 3 SX21185038

11 225 A18-011 Henderson County Fiscal Court Finely Addition Sewer Extension Sewer Extension 2,140,000 2,140,000 35,577 29,783 0 SX21101038

12 216 A18-012 Farmdale Sanitation District Phase I Collection System & 0.75 MGD WWTPNew WWTP & Collection

System12,250,000 10,827,000 44,577 34,505 1,305,000 2, 3 SX21073029

13 203 A18-013 Richmond, City of Richmond - TC15 Overflow Elimination Project SSO Correction 1,348,000 1,348,000 31,329 32,242 1,348,000 3 SX21151053

14 200 A18-014 Marshall County Sanitation District #2Marshall Co. Sanitation District #2 - Ext. to

Marshall Co. HighSewer Extension 3,066,988 3,066,988 46,696 284 150,000 3 SX21157035

15 200 A18-015 Elkton, City of Elkton - Sewer Collection System RehabilitationSewer

Replacement/Rehabilitation500,000 500,000 30,183 2,155 0 3 SX21219014

16 190 A18-016 La Grange Utilities Commission Pump Stations and Interceptor Sewer Upgrade Sewer Rehabilitation 2,020,500 2,020,500 55,088 7,777 50,000 3 SX21185059

17 190 A18-017 Versailles, City ofVersailles Wastewater Treatment Plant

ExpansionWWTP Expansion 20,911,190 20,911,190 47,371 15,614 1,985,000 1, 2, 3, 4 SX21239010

18 185 A18-018 Brodhead, City ofCity of Brodhead - WWTP Upgrade and

Improvement

Sewer

Replacement./Rehabilitatio

n/WWTP Rehabilitation

5,000,000 3,222,500 20,632 1,187 350,000 3 SX21203317

19 185 A18-019 Taylorsville, City ofTaylorsville Lake State Park, Marina & Edgewater

Resort Sewer Interconnect ProjectSewer Extension 810,000 810,000 43,363 1,395 0 SX21215005

2018 CWSRF Project Priority List(The heavy dark line indicates 1st-round loan invites, excluding bypassed projects.)

*Prioritized for an increase to an existing SRF construction loan.

**Prioritized for projects with an active SRF planning and design loan.

https://wris.ky.gov/Portal/SRFLoanPackage/CW-2018-001

http://wris.ky.gov/Portal/CWPrjData/SX21067048







































2018 CWSRF Project Priority List

20 171 A18-020 Mercer County Sanitation DistrictM C S D - Gwinn Island Road Sanitary Sewer

ExtensionSewer Extension 1,525,676 1,525,676 37,045 571 0 SX21167019

21 166 A18-021 Pikeville, City ofCity of Pikeville KY Wastewater Treatment Plant

UpgradeAdvanced Treatment 22,671,226 8,000,000 40,189 9,147 0 SX21195024

22 165 A18-022Paducah McCracken County Joint Sewer

AgencyWaid Package Plant Removal Project Sewer Extension 1,414,500 1,414,500 40,463 43,554 0 3 SX21035006

23 165 A18-023 Greenup Wastewater District Phase 2 Sewer Line Extension Project (Lloyd) Sewer Extension 4,215,000 4,215,000 0 SX21089111

24 158 A18-024 Frankfort, City ofFrankfort Sewer Department Capital Avenue

River InterceptorCSO Correction 1,750,000 1,750,000 44,577 34,505 150,000 3 SX21073070

25 152 A18-025 Hodgenville, City ofHodgenville WWTP Upgrade & Wet Weather

Storage

WWTP

Rehabilitationn/Upgrade3,570,000 227,000 30,399 3,647 0 SX21123007

26 152 A18-026 Regional Water Resource AgencyHawes Treatment Plant and Ragu Pump Station

UpgradesCSO Correction 5,619,274 5,619,274 41,810 72,417 4,230,994 3, 4 SX21059050

27 141 A18-027 Pineville, City ofVirginia Avenue/Courthouse Square Utility

Replacements & RevitalizationCSO Correctio 3,941,746 2,441,746 20,289 3,106 328,000 1 SX21013003

28 137 A18-028 Paducah, City ofPaducah Pump Station #2 (6th Street)

Rehabilitation

Sewer

Replacement/Rehabilitation5,105,000 5,105,000 33,608 25,024 4,500,000 3 SX21145012

29 135 A18-029 Dawson Springs City Water and SewerSanitary Sewer System Rehabilitation and WWTP

ImprovementsWWTP Rehabilitation 1,901,000 950,500 24,800 2,674 0 SX21107025

30 134 A18-030 Calhoun, City of Revlett Drive Sewer Line RepairSewer


31 133 A18-031 Frankfort, City ofFrankfort Sewer Department Buffalo Alley Pump

Station ReplacemenCSO Correction 1,300,000 1,300,000 44,577 34,505 250,000 3 SX21073072

32 133 A18-032 Frankfort, City ofFrankfort Sewer Department Mero Street Pump

Station ReplacementCSO Correction 2,050,000 2,050,000 44,577 34,505 250,000 3 SX21073079

33 132 A18-033Hopkinsville Water Environment

Authority

HWEA Phase IX Sewer Rehabilitation Priority 3 &

3A

Sewer

Replacement/Rehabilitation7,044,050 7,044,050 35,533 42,973 0 3 SX21047031

34 130 A18-034 Morganfield, City ofJob Corps Sewer Rehabilitation and Replacement

Project

Sewer


35 130 A18-035 Morganfield, City ofMorganfield Combined Sewer Separation

Project Phase 32,153,883 2,153,883 34,066 5,754 0 SX21225030

36 130 A18-036Lexington-Fayette Urban County

GovernmentWest Hickman Subbasin WH-7 WWS Tank SSO Correction 19,087,695 19,087,695 49,812 286,776 10,000,000 4 SX21067053

37 128 A18-037 Calhoun, City of Calhoun Wastewater Plant Replacement ProjectWWTP

Replacement/Rehabilitation2,480,000 2,480,000 32,847 1,176 85,000 3 SX21149031

38 128 A18-038 Frankfort, City ofFrankfort - Thornhill Sanitary Sewer

Replacement

Sewer











































39 127 A18-039 Oldham County Environmental AuthorityOCEA Lift Station Rehab, Renovation, and

Replacement

Sewer


40 125 A18-040 Jessamine-South Elkhorn Water District Windhaven Drive Sewer Collection System Sewer Extension 450,000 450,000 49,812 286,776 0 SX21113018

41 123 A18-041 Sebree, City of Sebree Sanitary Sewer ReplacementSewer


42 122 A18-042 Burkesville, City of Burkesville WWTP Revised WWTP Rehabilitation 2,750,000 1,750,000 19,522 1,499 0 SX21057002

43 120 A18-043Paducah McCracken County Joint Sewer

AgencyMassac Creek Phase III SSO Correction 2,020,000 2,020,000 40,463 43,554 0 SX21145017

44 115 A18-044 Garrard County Fiscal CourtGarrard Co SD - Paint Lick Sewer System - Phase

1Decentralized WWTP 440,000 410,000 30,170 3,992 185,000 4 SX21079014

45 115 A18-045 Berea, City ofBMU - Walnut Meadow Pump Station & South

Middletown Trunk Sewer ImprovementsSSO Correction 2,050,400 2,078,400 40,399 14,168 175,000 3 SX21151052

46 113 A18-046 Kuttawa, City ofCity of Kuttawa - Old Kuttawa Pump Station and

System Rehab.

Sewer

Replacement/Rehabilitation306,000 306,000 48,013 901 0 SX21143009

47 113 A18-047 Paris, City ofCity of Paris-Southern Hills Sanitary Sewer

Collection ProjectSewer Extension 1,820,000 1,820,000 37,260 10,102 0 3 SX21017010

48 110 A18-048 Hickman, City of Aeration Basin WWTP Rehabilitation 2,000,000 2,000,000 19,376 2,404 0 SX21075010

49 109 A18-049 Flatwoods, City of City of Flatwoods I & I Study and Rehab ProjectSSES & Sewer

Replacement/Rehabilitation650,000 650,000 42,474 7,719 400,000 3 SX21089056

50 108 A18-050 Prestonsburg, City ofRehab Prestonsburg's Old Wastewater

Treatment PlantWWTP Rehabilitation 847,400 847,400 24,435 7,680 0 SX21071013

51 105 A18-051 Russell, City ofCity of Russell I & I Study and Sewer Rehab

Project

SSES & Sewer

Replacement/Rehabilitation249,570 249,570 60,548 854 350,000 3 SX21089110

52 105 A18-052 Richmond, City of Richmond - Silver Creek Outfall Sewer, Phase ISewer


53 103 A18-053 Frankfort, City ofFrankfort Sewer Department WWTP Headworks

ReplacementWWTP Rehabilitation 5,900,000 5,900,000 44,577 34,505 800,000 3 SX21073069

54 103 A18-054 Bourbon County Fiscal CourtBourbon County Fiscal Court - Centerville Sewer

ProjectSewer Extension 2,500,000 2,500,000 37,260 10,102 0 SX21017009

55 100 A18-055 Stanford Water Commission Stanford Sewer Rehabilitation - Phase ISewer


56 100 A18-056 Wolfe County Sanitation District Hazel Green Wastewater Collection System 3,555,000 1,975,500 0 3 SX21237005

57 98 A18-057 Paris, City of City of Paris Rehab Sanitary Sewer MainsSewer

Replacement/Rehabiltiation250,000 250,000 37,260 10,102 0 3 SX21017015










































58 95 A18-058 Clay City, City of Clay City - Phase II Sewer System RehabSewer


59 95 A18-059 Lincoln County Fiscal CourtLincoln County Fiscal Court - Rowland Sanitary

Sewer ExtensionSewer Extension 130,000 160,000 23,095 4,851 0 SX21137019

60 90 A18-060 Hardinsburg, City ofHardinsburg Sewer System Rehabilitation Phase

21,000,000 1,000,000 40,133 2,242 400,000 3 SX21027013

61 90 A18-061 Marshall County Sanitation District #2MARSHALL COUNTY FISCAL COURT PHASE I

SANITARY SEWER EVALUATION

Sewer

Replacement/Rehabilitation997,643 997,643 46,696 284 0 3 SX21157026

62 90 A18-062 Paris, City ofCity of Paris - Bedford Acres Sanitary Sewer

Project Phase 2Sewer Extension 1,850,000 1,850,000 37,260 10,102 0 SX21017013

63 88 A18-063 Lancaster, City ofLancaster Wastewater Collection System Rehab

Project

Sewer


64 87 A18-064 South Shore, City ofSouth Shore: Upgrade Forest Heights Collection

Lines

Sewer


65 85 A18-065Princeton Water & Wastewater

Commission

Princeton Sewer Rehabilitation Phase II Basins 7

& 8

Sewer


66 85 A18-066 Paris, City ofCity of Paris - Claysville Trunk Sewer

Replacement Project, Phase IISSO Correction 1,825,000 1,825,000 37,260 10,102 1,825,000 2 SX21017004

67 82 A18-067 Smithland, City of Smithland Sewer RehabilitationSewer

Replacement/Rehabiltiation1,517,000 1,517,000 31,923 335 0 3 SX21139010

68 80 A18-068 Flemingsburg, City ofFlemingsburg Marys Avenue & Tinnerman Drive

Sewer Line Replacement

Sewer


69 80 A18-069 Catlettsburg, City of Pump Station Rehab ProjectSewer

Replacement/Rehabilitation1,321,000 1,321,000 31,848 2,428 0 SX21019082

70 78 A18-070 Eddyville, City ofWestern Kentucky Correctional Complex Pump

Station

Sewer


71 77 A18-071 South Shore, City of South Shore: Upgrade Lift Stations 4, 5, and 6Sewer


72 75 A18-072 Stanford, City of Stanford - US 27 South Sewer Expansion Project Sewer Extension 5,326,420 5,326,420 23,095 4,851 0 SX21137015

73 75 A18-073 Richmond, City of RIchmond - MoteI 6 Lift Station ReplacementSewer


74 72 A18-074 Uniontown, City of Uniontown Lagoon Dredging WWTP Rehabilitation 1,500,000 1,500,000 25,710 1,086 0 SX21225022

75 70 A18-075 West Point, City of West Point WWTP Expansion & Upgrade WWTP Expansion 3,257,000 252,000 46,211 23,239 0 SX21093025








































76 60 A18-076 Clarkson, City of Clarkson Sewer System Improvements

Sewer

Replacement/Rehabilitiatio

n/WWTP Rehabilitation

1,000,000 1,000,000 23,215 898 0 SX21085009

77 58 A18-077 Fredonia, City of Fredonia - Lift Station ImprovementsSewer

Replacement/Rehabilitation369,736 369,736 43,532 413 0 SX21033006

78 55 A18-078 Mayfield Electric & Water SystemsWildwood Subdivision Sewer Line Extension

from HWY 121Sewer Extension 186,266 186,266 26,242 10,827 0 SX21083056

79 55 A18-079 Boyd County Sanitation District #4 SD4: Rehab Ray Drive Sewer LineSewer

Replacement/Rehabilitation312,000 312,000 47,846 10,722 0 SX21019077

80 53 A18-080 Frankfort, City ofFrankfort Sewer Department FSD Prevention

Park Pump Station Replacement

Sewer

Replacement/Rehabiltiation1,500,000 1,500,000 44,577 34,505 0 3 SX21073047

81 51 A18-081 Northern Madison Sanitation DistrictNMCSD - Madison Village Collection System

Rehab

Sewer


82 50 A18-082 Salyersville, City of Allen Drive Lift StationSewer

Replacement/Rehabiltiation168,285 168,285 23,969 2,967 0 SX21153005

83 50 A18-083 Lancaster, City of Lancaster Sewer Line Extension to Industrial Park Sewer Extension 403,550 403,550 30,170 3,992 0 SX21079015

84 50 A18-084 Danville, City of Danville Major Sewer System RehabilitationSewer


85 49 A18-085 Sacramento, City of Sacramento Gravity Sewers - Phase IISewer

Replacement/Rehabilitation1,508,852 1,508,852 36,234 760 0 3 SX21149034

86 49 A18-086 Madisonville, City of Madisonville - Hanson Relief InterceptorSewer


87 48 A18-087 Irvine, City ofWall Street Sewer Extension - Irvine Municipal

UtilitiesSewer Extension 309,000 309,000 26,357 4,656 0 SX21065006

88 47 A18-088 Smithland, City of Smithland Lagoon Rehabilitation Project WWTP Rehabilitation 135,812 135,812 31,923 335 0 SX21139014

89 40 A18-089 Midway, City of Midway Brand Street Sewer Rehab ProjectSewer

Replacement/Rehabilitation670,000 670,000 52,106 1,722 0 SX21239003

90 30 A18-090 Mayfield Electric & Water SystemsGravity Sewer Extension from the intersection of

I69 and Hwy45Sewer Extension 116,499 116,499 26,242 10,827 0 SX21083009

91 30 A18-091 Mayfield Electric & Water Systems Gravity line extension from Hwy 45 North Sewer Extension 213,732 213,732 26,242 10,827 0 SX21083029

Total Totals: $ 394,365,064 $ 282,961,158 $ 42,152,318



































22

APPENDIX B

CALL FOR PROJECTS LETTER

KENTUCKY INFRASTRUCTURE AUTHORITY

Matthew G. Bevin

Governor

KentuckyUnbridledSpirit.com An Equal Opportunity Employer M/F/D

1024 Capital Center Drive, Suite 340 Frankfort, Kentucky 40601

Phone (502) 573-0260 Fax (502) 573-0157

http://kia.ky.gov

October 14, 2016

To Whom It May Concern:

The Kentucky Infrastructure Authority and the Kentucky Division of Water are announcing the 2018 Clean Water

State Revolving Fund Call for Projects.

The Clean Water State Revolving Fund Call For Projects

Will Be Open from October 14, 2016 to December 16, 2016

If you have a wastewater, stormwater or nonpoint source project that will need funding during the 2018 state

fiscal year (July 1, 2017 through June 30, 2018), we want to hear from you as your project may be eligible for

funding from the Clean Water State Revolving Fund (CWSRF). The CWSRF is a competitive program. To

qualify to apply for a low interest CWSRF loan, your project MUST be ranked and listed on the 2018 CWSRF

Project Priority List developed by the Division of Water (DOW). Projects will not be carried forward from the

2017 project priority list to the 2018 project priority list.

You Will Need a Project Profile for Your Project

To submit a project for inclusion on the CWSRF Priority List you must work with your local Area Water

Management Council (AWMC) through the Area Development District (ADD) to complete or update a Project

Profile (and related mapping) in the Water Resource Information System (WRIS). All information needed by

DOW to review and rank potential CWSRF projects has been incorporated into the Project Profile template.

Complete the fill in template and then send the information to your AWMC before their next meeting. Once your

project has been submitted you will receive an email confirmation. Please ensure that project cost estimates have

been updated.

Your Project Profile MUST be Approved by the Area Water Management Council

For your project to be included in the CWSRF Priority List your Project Profile must have AWMC approval. The

Project Profile includes the information necessary to evaluate potential CWSRF projects. The ADD staff may

have already contacted you to provide additional information to update your existing project profiles. To give the

ADD staff time to get your profile approved by the AWMC, you must get the profile information to your AWMC

before their next meeting.

DOW strongly encourages you to read the Integrated Project Priority Ranking System (IPPRS) document before

you submit your Project Profile as you might obtain some useful ideas to improve your project’s overall score.

Only those projects that can start construction by March 31, 2019 will be considered for funding.

https://wris.ky.gov/downloads/wris/CleanWater_ProjectProfileApp_v20RdrExt.pdf

https://wris.ky.gov/downloads/srf/cfp/CWSRF_Priority_System_Guidance_Document_FY2018.pdf

KentuckyUnbridledSpirit.com An Equal Opportunity Employer M/F/D

Current Interest Rates

Projected interest rates for the program will be provided in the 2018 CWSRF Intended Use Plan (IUP) which will

be available late Spring 2017. Rates provided in the IUP are subject to approval by the KIA Board. KIA

currently offers three interest rates for the CWSRF program. The standard rate of 2.75% is available for

borrowers with a median household income (MHI) at or above $43,342, the MHI of the Commonwealth according

to U.S. Census estimates from American Factfinder. A 1.75% rate is offered to borrowers whose MHI is between

$43,342 and $34,673 (80% of the Commonwealth MHI). The 1.75% rate also applies to those projects that

facilitate compliance with an order or judgment addressing environmental non-compliance or those systems that

are considered regional. To qualify for the 0.25% rate, the borrower must have an MHI at or below $34,673.

Sustainable Infrastructure Initiative

A brochure that highlights the Sustainable Infrastructure (SI) initiative launched by EPA and the Kentucky

Division of Water in 2008 is available on KIA’s and DOW’s websites. Projects that incorporate some of the

practices and recommendations described in the SI brochure may receive additional points, resulting in a higher

ranking on the CWSRF Project Priority List. The DOW encourages you to contact them with any questions or

feedback regarding the SI initiative.

Questions?

If you have questions about completing the questionnaire or project eligibility for priority list inclusion, please

contact Anshu Singh ([email protected]) or Jory Becker ([email protected]) at the Water Infrastructure

Branch or call (502) 564-3410. For more information on loan requirements, terms or eligibility, please contact

Jami Johnson ([email protected]) or Brandi Norton ([email protected]) at KIA or call (502) 573-0260.

Sincerely,

Sandra Dunahoo, Board Chair

Kentucky Infrastructure Authority

http://water.ky.gov/Funding/Pages/SRFForms.aspx





25

APPENDIX C

PRIORITY SYSTEM GUIDANCE DOCUMENT

KENTUCKY Priority System Guidance Document

For Wastewater, Stormwater and Nonpoint Source Projects

Eligible To Be Funded By The

KENTUCKY CLEAN WATER STATE REVOLVING FUND

2018 Funding Cycle

ENERGY AND ENVIRONMENT CABINET

Department for Environmental Protection Division of Water

300 Sower Boulevard – 3rd Floor

Frankfort, Kentucky 40601 Phone: (502) 564-3410

Fax: (502) 564-4245 water.ky.gov

Kentucky Priority System Guidance Document for Clean Water

Table of Contents I. Introduction ........................................................................................................... 1 II. Identifying and Ranking Water Quality Priorities ................................................... 2

A. Project Needs ................................................................................................... 2 B. Regionalization ................................................................................................. 4 C. Compliance and Enforcement .......................................................................... 5 D. Water Quality ................................................................................................... 5 E. Financial Need ................................................................................................. 6 F. Asset Management .......................................................................................... 7 G. Green Projects ................................................................................................. 7 H. Project Readiness ........................................................................................... 11

III. Summary of Points System Used to Establish Project Priority Ranking .............. 13 IV. Developing and Updating the Project Priority List and Intended Use Plan ........... 17 V. Eligible Project Applicants ................................................................................... 17 VI. References .......................................................................................................... 18 VII. Kentucky Division of Water State Priority Watersheds .......................................... 19 VIII. 319h Funded Watershed-Based Plans in Kentucky………… ............................... 20


1

I. Introduction The Federal Water Pollution Control Act of 1956 provided a strong role for the federal government in the construction of publicly owned wastewater treatment works. The amendments enacted in 1972, commonly referred to as the Clean Water Act (CWA), expanded the level of federal aid and increased the federal grant share in an effort by Congress to speed up the pace of construction of wastewater treatment facilities and eliminate the backlog of needed facilities. The 1977 Amendments to the Clean Water Act directed the Environmental Protection Agency (EPA) to delegate most of its construction grants management functions to the states. EPA continued to provide funds for grants to local governments to construct wastewater treatment facilities through federal fiscal year (FFY) 1990. The Water Quality Act of 1987, which amended the CWA, authorized EPA to make capitalization grants to each state for the purpose of establishing a water pollution control revolving fund for providing financial assistance for projects designed to protect and restore water quality, including publicly owned treatment works (POTWs), nonpoint source pollution control, and estuary management. EPA made capitalization grants beginning in FFY 1987. However, when federal funding ends, the Clean Water State Revolving Fund (CWSRF) is to be maintained in perpetuity by the state in place of federal participation. The Kentucky General Assembly enacted House Bill 217 during the 1988 legislative session, which established the CWSRF as an enduring and viable fund. This fund is intended to allow the Commonwealth of Kentucky to qualify for the federal CWSRF capitalization grants. The CWA requires, in section 602, a state match to be deposited into the CWSRF of an amount equal to at least 20 percent of the total amount of all capitalization grants which will be made to the State. The CWSRF may fund projects for construction of publicly owned treatment works as defined in section 212 of the Clean Water Act, including stormwater projects. Amendments to the program will also allow funding of projects for: decentralized systems; stormwater or subsurface drainage water; water conservation, efficiency, or reuse; watershed projects as defined in section 122; energy consumption; reuse or recycling of wastewater, stormwater, or subsurface drainage water; security; and assistance by nonprofit agencies. The CWSRF may also fund nonpoint source pollution control activities which implement the U.S. EPA-approved Kentucky Nonpoint Source Management Program - 2.0 (Kentucky Division of Water, 2002) required under Section 319 of the Clean Water Act, which lists specific activities for controlling nonpoint source pollution impacts and identifies responsible implementing agencies and potential/available funding sources. The purpose of this document is to outline the Division of Water’s (DOW) project selection and ranking criteria which shall be used to establish project priority ranking in the annual CWSRF Intended Use Plan (IUP). This document complies with EPA’s Integrated Planning and Priority Setting in the Clean Water State Revolving Fund guidance (EPA-832-R-01-002 March 2001), which states, “An integrated planning and priority setting system is effective if it ensures that CWSRF-funded projects address high priority water quality problems. Four actions are key to its success: identifying water quality priorities, assessing the CWSRF role, undertaking outreach efforts, and selecting priority projects.” DOW is committed to reassessing the Integrated Project Priority Ranking Criteria and Points System upon the completion of the initial review and ranking process and development of the Project Priority List. Modifications may be made to the criteria and points system if it is determined this process does not meet EPA’s guidance for utilizing the CWSRF to address the high priority water quality problems.


2

II. Identifying and Ranking Water Quality Priorities According to the March 2001 EPA IPPS guidance:

“Water quality priorities provide a context for the activities of the CWSRF program. CWSRF resources should address these priorities in the most efficient manner possible. State water quality priorities also provide a valuable standard against which a state can measure the success of its water quality programs, i.e., has the state used its resources to address its highest water quality priorities? A state’s water quality program should be the CWSRF’s major resource in identifying the state’s water quality priorities. A water quality program has typically developed its understanding of the state’s priorities by considering water quality information from many sources. Familiarity with these sources of water quality information is also useful to the CWSRF during the development of project ranking systems.”

DOW operates several water quality programs that have proven useful to identify criteria for ranking projects in the context of CWSRF funding priority. All surface waters in Kentucky are assessed based on a five-year, rotating watershed basin cycle. Assessment data and narrative explanations are compiled into the 305(b) Report to Congress. Section 303(d) of the CWA requires each state to list those waters within its boundaries for which technology based effluent limitations are not stringent enough to protect any water quality standard applicable to such waters. The 303(d) List of Waters identifies all waters assessed as "impaired" for one or more pollutants, and are therefore waters not "meeting the water quality standard." Listed waters are prioritized with respect to designated use classifications and the severity of pollution. The 305(b) report and 303(d) list are now published together in the Integrated Report to Congress on Water Quality in Kentucky http://water.ky.gov/waterquality/Pages/IntegratedReport.aspx. Kentucky is required to develop Total Maximum Daily Loads (TMDLs) for those water bodies that are not meeting water quality standards. The TMDL process establishes the allowable loadings of pollutants or other quantifiable parameters for a waterbody based on the relationship between point and nonpoint pollution sources and in-stream water quality conditions. See the following website for approved TMDLs http://water.ky.gov/waterquality/Pages/ApprovedTMDLs.aspx. As required in 200 KAR 17:050, the cabinet must determine the priority for funding eligible projects to be included on the Project Priority List based on criteria established pursuant to 33 U.S.C. 1296, which states that projects should be designed to achieve optimum water quality management consistent with public health and water quality goals, and the following: A. Project Needs

A project is awarded points based on the importance of the need in addressing a water quality or public health problem. Each of the need categories are defined in this section.

Criterion #1: Combined Sewer Overflow (CSO) Correction- Correction measures used to achieve water quality objectives by preventing or controlling periodic discharges of a mixture of stormwater and untreated wastewater (combined sewer overflows) that occur when the capacity of a sewer system is exceeded. Points Received: 40


3

Criterion #2: Sanitary Sewer Overflow (SSO) Correction- Control of sanitary sewer overflows caused by undersized lines and/or excessive infiltration and inflow into the sanitary sewer collection system. Sanitary sewer overflow refers to overflow, spill, release, or discharge of untreated or partially treated wastewater from a sanitary sewer system. Points Received: 30 Criterion #3: Replacement or Rehabilitation of Aging Infrastructure, including correction of moderate infiltration and inflow (i.e., no associated SSO)- The problem of water penetration into a sewer system from the ground through such means as defective pipes or manholes or from sources such as drains, storm sewers, and other improper entries into the systems is referred to as infiltration and inflow (I/I). Reinforcement or reconstruction of structurally deteriorating sewers and pipes used to collect and convey wastewater by gravity or pressure flow to a common point are projects designed to correct I/I (i.e., no associated SSO) go under this criterion. Points Received: 20 Criterion #4: New Treatment Plant- Construction of a new facility including any devices and systems used in the storage, treatment, recycling or reclamation of municipal sewage, sewage sludge, and biosolids, or industrial waste. Points Received: 10 Criterion #5: New Collector Sewers and Appurtenances- Install new pipes used to collect and carry wastewater from a sanitary or industrial wastewater source to an interceptor sewer that will convey the wastewater to a treatment plant. Points Received: 10 Criterion #6: Decentralized Wastewater Treatment Systems- This includes onsite, mound, and/or cluster treatment systems that process household and/or commercial sewage that may include, but are not limited to, septic systems, disposal beds, and packaged wastewater treatment plants configured to treat and dispose of wastewater without offsite discharge. Often the wastewater is percolated into the soil through infiltration beds or trenches or is disposed by irrigation or other means. Points Received: 20 Criterion #7: Upgrade to Advanced Treatment- Upgrade of a facility to a level of treatment that is more stringent than secondary treatment or produces a significant reduction in nonconventional pollutants. Points Received: 20 Criterion #8: Optimization of Existing Treatment Plant- Rehabilitation, upgrades, improvements, or expansion of existing treatment plant. Points Received: 20 Criterion #9: New Interceptors and Appurtenances- Install new major sewer lines receiving wastewater flows from collector sewers. The interceptor sewer carries wastewater directly to the treatment plant or another interceptor. Points Received: 10

Criterion #10: Storm Water Control- Storm water is defined as runoff water resulting from precipitation. Includes activities to plan and implement municipal storm water management programs with environmental benefits pursuant to National Pollutant


4

Discharge Elimination System permits for discharges from municipal separate storm sewer systems. Points Received: 20 Criterion #11: Nonpoint Source (NPS) Pollution Control- NPS projects may include, but are not limited to, stream restoration, Best Management Practices, and land purchases. Points Received: 20 Criterion #12: Recycled Water Distribution- Projects may include, but are not limited to, the recycling of nonpotable water or reclaimed water for irrigation and other nonpotable uses. Points Received: 10 Criterion #13: Planning- Developing plans to address water quality and water quality-related public health problems that are supported by sound science and appropriate technology. Examples included Watershed-Based Plan, Total Maximum Daily Load Implementation Plans and Long-term Control Plans for Combined Sewer Overflow (CSO). Points Received: 10 Criterion #14: Other- Any project that does not meet the list of project needs definitions and/or standards provided above. Project need must be provided. Points Received: 10

B. Regionalization

Criterion #1: Will this project provide regionalization and/or consolidation of wastewater treatment systems? This question addresses regionalized wastewater treatment approaches which may significantly minimize wastewater impacts. Regionalization occurs when smaller systems integrate part or all of their wastewater management systems to reduce costs, improve service, and maintain regulatory compliance. Smaller systems, regardless of ownership status, lack economies of scale and often have a difficult time finding the capital and human resources required to comply with stringent water quality standards to remain viable. Regionalized wastewater treatment approaches may significantly minimize wastewater impacts, resulting in a reduced number of KPDES discharges. This includes projects that will combine one or more existing treatment plants, result in the abandonment of one or more wastewater treatment plants and connection to an existing wastewater treatment plant, acquisitions of smaller systems by larger systems, and mergers between utilities. Project must reduce the number of KPDES discharges. Points Received: 20 Criterion # 2: Will this project eliminate a package treatment plant that is more than 25 years old? Points Received: 25 Criterion # 3: Will this project eliminate a package treatment plant that has received notices of violations resulting in degradation of waters of Commonwealth within the last two state fiscal years - July 2014 - June 2016? Points Received: 25


5

C. Compliance and Enforcement

Criterion #1: Is the project necessary to achieve full or partial compliance with a court order, or a judicial or administrative consent decree? Points Received: 50 Criterion #2: Primary system has not received any CWA Notices of Violation within the previous state fiscal year-July through June, i.e. July 2015 – June 2016). Points Received: 25

D. Water Quality

Criterion #1: Will the project implement an approved Total Maximum Daily Load (TMDL) for impaired waterbodies? Is the project located on a stream having an approved TMDL? See the following website for approved TMDLs http://water.ky.gov/waterquality/Pages/ApprovedTMDLs.aspx. Points Received: 10 Criterion #2: Will the project address existing or projected nutrient TMDL? Is the TMDL established for nutrients or is the stream nutrient impaired? Refer to the DOW website for impairment/TMDL information http://water.ky.gov/waterquality/Pages/Integrated Report.aspx. Points Received: 30 Criterion #3: Will the project implement any part of an approved Watershed Plan? Please refer to list of approved watershed plans in Section VIII. Points Received: 10

Criterion #4: Will the project make reasonable progress towards eliminating identified pollutant sources for waterbodies that appear in the Integrated Report to Congress on Water Quality in Kentucky? This question addresses the state’s goal to improve water quality in impaired waterbodies. The Integrated Report and maps are available on DOW’s website. http://water.ky.gov/waterquality/Pages/IntegratedReport.aspx. The reports list the impaired waterbodies with the pollutants of concern and probable sources of the pollutants. Points Received: 20 for each pollutant-water body combination addressed

Criterion #5: Will the project eliminate existing or potential sources of pollution in groundwater sensitivity areas? This question considers the importance of groundwater as one of Kentucky's vital resources as a source of drinking water, a source for industrial and agricultural use, and the source of sustained base flow in most streams. Groundwater is classified according to its sensitivity to pollution on a scale from 1 (lowest) to 5 (highest). Groundwater data is available for download at http://kygeonet.ky.gov/metadataexplorer/. Points Received: 15 if project is in a 4 or 5 sensitivity area Points Received: 10 if project is in a 2.5 or 3 sensitivity area Criterion #6: Will the project eliminate existing or potential sources of pollution in an identified SWAPP zone or WHPA? Each public water system (PWS) must develop a Source Water Assessment and


6

Protection Plan (SWAPP) which delineates its drinking water source protection area, called SWAPP zones or Wellhead Protection Areas (WHPA), and potential sources of contamination within those areas. Look up SWAPP and WHPA areas in the Watershed Viewer at http://eppcmaps.ky.gov/website/watershed/viewer.htm. Points Received: 10 for each SWAPP Zone 1 or WHPA Zone 3 Points Received: 7 for each SWAPP Zone 2 or WHPA Zone 2 Points Received: 3 for each SWAPP Zone 3 or WHPA Zone 1 Criterion #7: Will the project make reasonable progress towards eliminating identified pollutant sources of water quality impairments within an identified DOW Priority Watershed? The Division of Water has developed a list of state priority watersheds at the HUC11 level. Refer to the list of Kentucky Division of Water State Priority Watersheds in Section VII. Points Received: 20 Criterion #8: Will the project protect Special Use Waters? This question considers the importance of protecting special waters in Kentucky. Special Use Waters are rivers, streams and lakes listed in Kentucky Administrative Regulations (http://www.lrc.state.ky.us/kar/TITLE401.HTM) as Cold Water Aquatic Habitat (401 KAR 10:031 Section 4), Exceptional Waters (401 KAR 10:030 Section 1), Reference Reach Waters (401 KAR 10:030 Section 1), Outstanding State Resource Waters (401 KAR 10:031 Section 8), Outstanding National Resource Waters (401 KAR 10:030 Section 1), State Wild Rivers (Kentucky Wild Rivers Act of 1972), and Federal Wild and Scenic Rivers (Wild and Scenic Rivers Act, PL 90-542). http://water.ky.gov/waterquality/Pages/SpecialUseWaters.aspx Points Received: 10

Criterion #9: Will the project eliminate existing or potential sources of contamination within a 5-mile radius of a drinking water source location? This question considers the importance of protecting drinking water supplies from potential contaminant sources. Points Received: 10 Criterion #10: Will the project eliminate failing on-site septic tanks or straight pipes? This question considers the importance of protecting groundwater and surface water quality from potential contaminant sources. Points Received: 15

E. Financial Need

This section of the project ranking criteria considers the importance or the ability of facilities/systems to acquire and manage sufficient financial resources to achieve and maintain regulatory compliance. Points will be given if the project is in an area of Kentucky where the Median Household Income (MHI) is below 80 percent of the Commonwealth’s MHI as determined by the American Community Survey (ACS) 5-Year Estimate (2009-2013). Points Received: 20 Points will be given if the project is an area with a MHI between 80 and 100 percent of the Commonwealth’s MHI as determined by the ACS 5 Year Estimate (2009-2013). Points Received: 10


7

F. Asset Management Criterion #1: System has or is developing an Asset Management Program or similar planning document. Points will be given if the system has mapped its treatment and collection system and analyzed conditions, including risks of failure, expected dates of renewals and ultimate replacements, and sources and amounts of revenues needed to finance operation, maintenance, and capital needs (i.e. Capital Improvement Plan (CIP), Asset Inventory Report). To obtain points under this category, evidence of the program must be uploaded in WRIS. Points Received: 20 Criterion #2: System’s monthly wastewater bill, based on 4,000 gallons, as a percentage of Median Household Income is:

Greater than or equal to 2% Points Received: 10

Between 1 and 1.99% Points Received: 5 Below 1% Points Received: 0 Criterion #3: System has specifically allocated funds for the rehabilitation and replacement of aging and deteriorating infrastructure (The funds allocated to the current sinking fund account should not be a requirement of an existing loan, but a good business practice). To obtain points under this category supporting documents must be uploaded in WRIS (i.e. approved budget). Points Received: 10

G. Green Projects

The following four categories will be considered incentives by the Kentucky Division of Water, and projects that incorporate components from any of the categories will receive bonus points. Projects with an “*” require business case.

1. Green Infrastructure:

Green stormwater infrastructure includes a wide array of practices at multiple scales that manage wet weather and that maintains and restores natural hydrology by infiltrating, evapotranspiring and harvesting and using stormwater. On a regional scale, green infrastructure is the preservation and restoration of natural landscape features, such as forests, floodplains and wetlands, coupled with policies such as infill and redevelopment that reduce overall imperviousness in a watershed. On the local scale green infrastructure consists of site- and neighborhood-specific practices, such as bioretention, trees, green roofs, permeable pavements and cisterns. Examples:

• Implementation of green streets (combinations of green infrastructure practices in transportation rights-of-ways), for either new development, redevelopment or retrofits including: permeable pavement, bioretention, trees, green roofs, and other practices such as constructed wetlands that can be designed to mimic natural hydrology and reduce effective imperviousness at one or more scales. Vactor trucks and other capital equipment necessary to maintain green infrastructure projects.

• Wet weather management systems for parking areas including: permeable pavement, bioretention, trees, green roofs, and other practices such as


8

constructed wetlands that can be designed to mimic natural hydrology and reduce effective imperviousness at one or more scales. Vactor trucks and other capital equipment necessary to maintain green infrastructure projects.

• Implementation of comprehensive street tree or urban forestry programs, including expansion of tree boxes to manage additional stormwater and enhance tree health.

• Stormwater harvesting and reuse projects, such as cisterns and the systems that allow for utilization of harvested stormwater, including pipes to distribute stormwater for reuse.

• Downspout disconnection to remove stormwater from sanitary, combined sewers and separate storm sewers and manage runoff onsite.

• Comprehensive retrofit programs designed to keep wet weather discharges out of all types of sewer systems using green infrastructure technologies and approaches such as green roofs, green walls, trees and urban reforestation, permeable pavements and bioretention cells, and turf removal and replacement with native vegetation or trees that improve permeability.

• Establishment or restoration of permanent riparian buffers, floodplains, wetlands and other natural features, including vegetated buffers or soft bioengineered stream banks. This includes stream day lighting that removes natural streams from artificial pipes and restores a natural stream morphology that is capable of accommodating a range of hydrologic conditions while also providing biological integrity. In highly urbanized watersheds this may not be the original hydrology.

• Projects that involve the management of wetlands to improve water quality and/or support green infrastructure efforts (e.g., flood attenuation).

� Includes constructed wetlands. � May include natural or restored wetlands if the wetland and its multiple functions

are not degraded and all permit requirements are met.

• The water quality portion of projects that employ development and redevelopment practices that preserve or restore site hydrologic processes through sustainable landscaping and site design.

• Fee for simple purchase of land or easements on land that has a direct benefit to water quality, such as riparian and wetland protection or restoration.

• Fencing to keep livestock out of streams and stream buffers. Fencing must allow buffer vegetation to grow undisturbed and be placed a sufficient distance from the riparian edge for the buffer to function as a filter for sediment, nutrients and other pollutants.*

Points Received: 5 each / maximum 10

Projects That Do Not Meet the Definition of Green Infrastructure:

• Stormwater controls that have impervious or semi-impervious liners and provide no compensatory evapotranspirative or harvesting function for stormwater retention.

• Stormwater ponds that serve an extended detention function and/or extended filtration. This includes dirt lined detention basins.

• In-line and end-of-pipe treatment systems that only filter or detain stormwater.

• Underground stormwater control and treatment devices such as swirl concentrators, hydrodynamic separators, baffle systems for grit, trash removal/floatables, oil and grease, inflatable booms and dams for in-line underground storage and diversion of flows.

• Stormwater conveyance systems that are not soil/vegetation based (swales) such as pipes and concrete channels.

• Hardening, channelizing or straightening streams and/or stream banks.

• Street sweepers, sewer cleaners, and vactor trucks unless they support green infrastructure projects.


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2. Water Efficiency: EPA’s WaterSense program defines water efficiency as the use of improved technologies and practices to deliver equal or better services with less water. Water efficiency encompasses conservation and reuse efforts, as well as water loss reduction and prevention, to protect water resources for the future. Examples:

• Installing or retrofitting water efficient devices, such as plumbing fixtures and appliances � For example -- shower heads, toilets, urinals and other plumbing devices � Implementation of incentive programs to conserve water such as rebates.

• Installing any type of water meter in previously unmetered areas � If rate structures are based on metered use � Can include backflow prevention devices if installed in conjunction with water

meter

• Replacing existing broken/malfunctioning water meters, or upgrading existing meters, with: � Automatic meter reading systems (AMR), for example: Advanced metering

infrastructure (AMI), Smart meters � Meters with built in leak detection � Can include backflow prevention devices if installed in conjunction with water

meter replacement

• Retrofitting/adding AMR capabilities or leak detection equipment to existing meters (not replacing the meter itself).

• Water audit and water conservation plans, which are reasonably expected to result in a capital project.

• Recycling and water reuse projects that replace potable sources with non-potable sources, � Gray water, condensate and wastewater effluent reuse systems (where local

codes allow the practice) � Extra treatment costs and distribution pipes associated with water reuse.

• Retrofit or replacement of existing landscape irrigation systems with more efficient landscape irrigation systems, including moisture and rain sensing equipment.

• Retrofit or replacement of existing agricultural irrigation systems with more efficient agricultural irrigation systems.

• Water meter replacement with traditional water meters.*

• Projects that result from a water audit or water conservation plan.*

• Storage tank replacement/rehabilitation to reduce loss of reclaimed water.*

• New water efficient landscape irrigation system (where there currently is not one).*

• New water efficient agricultural irrigation system (where there currently is not one).*

Points Received: 5 each / maximum 10 Projects That Do Not Meet the Definition of Water Efficiency:

• Agricultural flood irrigation.

• Lining of canals to reduce water loss.

• Replacing drinking water distribution lines.

• Leak detection equipment for drinking water distribution systems, unless used for reuse distribution pipes.

3. Energy Efficiency:

Energy efficiency is the use of improved technologies and practices to reduce the energy consumption of water quality projects, use energy in a more efficient way, and/or produce/utilize renewable energy.


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Examples:

• Renewable energy projects such as wind, solar, geothermal, micro-hydroelectric, and biogas combined heat and power systems (CHP) that provide power to a POTW. Micro-hydroelectric projects involve capturing the energy from pipe flow. � POTW owned renewable energy projects can be located onsite or offsite. � Includes the portion of a publicly owned renewable energy project that serves

POTW’s energy needs. � Must feed into the grid that the utility draws from and/or there is a direct

connection.

• Collection system Infiltration/Inflow (I/I) detection equipment

• POTW energy management planning, including energy assessments, energy audits, optimization studies, and sub-metering of individual processes to determine high energy use areas, which are reasonably expected to result in a capital project are eligible.

• POTW projects or unit process projects that achieve energy efficiency improvement. Retrofit projects should compare energy used by the existing system or unit process to the proposed project. The energy used by the existing system should be based on name plate data when the system was first installed, recognizing that the old system is currently operating at a lower overall efficiency than at the time of installation. New POTW projects or capacity expansion projects should be designed to maximize energy efficiency and should select high efficiency premium motors and equipment where cost effective. Estimation of the energy efficiency is necessary for the project to be counted toward GPR.*

• Projects implementing recommendations from an energy audit.*

• Projects that cost effectively eliminate pumps or pumping stations.*

• Infiltration/Inflow (I/I) correction projects that save energy from pumping and reduced treatment costs and are cost effective*.

• Projects that count toward GPR cannot build new structural capacity. These projects may, however, recover existing capacity by reducing flow from I/I.*

• Replacing pre-Energy Policy Act of 1992 motors with National Electric Manufacturers Association (NEMA) premium energy efficiency motors.*

• Upgrade of POTW lighting to energy efficient sources such as metal halide pulse start technologies, compact fluorescent, light emitting diode (LED).*

• SCADA systems can be justified based upon substantial energy savings.*

• Variable Frequency Drive can be justified based upon substantial energy savings.*

Points Received: 10 each/ no maximum

Projects That Do Not Meet the Definition of Energy Efficiency:

• Renewable energy generation that is privately owned or the portion of a publicly owned renewable energy facility that does not provide power to a POTW, either through a connection to the grid that the utility draws from and/or a direct connection to the POTW.

• Simply replacing a pump, or other piece of equipment, because it is at the end of its useful life, with something of average efficiency.

• Facultative lagoons, even if integral to an innovative treatment process.

• Hydroelectric facilities, except micro-hydroelectric projects. Micro-hydroelectric projects involve capturing the energy from pipe flow.

4. Environmentally Innovative:

Environmentally innovative projects include those that demonstrate new and/or innovative approaches to delivering services or managing water resources in a more sustainable way. Examples:

• Total/integrated water resources management planning likely to result in a capital project.

• Utility Sustainability Plan consistent with EPA SRF’s sustainability policy.


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• Greenhouse gas (GHG) inventory or mitigation plan and submission of a GHG inventory to a registry (such as Climate Leaders or Climate Registry)

• Planning activities by a POTW to prepare for adaptation to the long-term effects of climate change and/or extreme weather.

• Construction of US Building Council LEED certified buildings or renovation of an existing building on POTW facilities.

• Decentralized wastewater treatment solutions to existing deficient or failing onsite wastewater systems.

• Constructed wetlands projects used for municipal wastewater treatment, polishing, and/or effluent disposal.*

• Projects or components of projects that result from total/integrated water resource management planning consistent with the decision criteria for environmentally innovative projects and that are Clean Water SRF eligible.*

• Projects that facilitate adaptation of POTWs to climate change identified by a carbon footprint assessment or climate adaptation study.*

• POTW upgrades or retrofits that remove phosphorus for beneficial use, such as biofuel production with algae.*

• Application of innovative treatment technologies or systems that improve environmental conditions and are consistent with the Decision Criteria for environmentally innovative projects such as:*

� Projects that significantly reduce or eliminate the use of chemicals in wastewater treatment;

� Treatment technologies or approaches that significantly reduce the volume of residuals, minimize the generation of residuals, or lower the amount of chemicals in the residuals. Includes composting, class A and other sustainable biosolids management approaches.

• Educational activities and demonstration projects for water or energy efficiency.*

• Projects that achieve the goals/objectives of utility asset management plans.*

• Sub-surface land application of effluent and other means for ground water recharge, such as spray irrigation and overland flow.*

� Spray irrigation and overland flow of effluent is not eligible for GPR where there is no other cost effective alternative.

Points Received: 5 each / maximum 10 Projects That Do Not Meet the Definition of Environmentally Innovative:

• Air scrubbers to prevent nonpoint source deposition.

• Facultative lagoons, even if integral to an innovative treatment processes.

• Surface discharging decentralized wastewater systems where there are cost effective soil-based alternatives.

• Higher sea walls to protect POTW from sea level rise.

• Reflective roofs at POTW to combat heat island effect.

H. Project Readiness: Criterion# 1: Borrower has submitted complete technical plans to the Division of Water; and Criterion# 2: Borrower has conducted a full environmental review for all components of the project or has completed the cross-cutter scoping process (including eClearinghouse, US Fish and Wildlife service, National Resource Conservation Service, and U. S. Army Corps of Engineers); and Criterion# 3: Borrower has received funding commitments from other funding sources; or the CWSRF is the sole source of funding. To be considered “project ready”, the borrower must have completed a majority of the


12

planning phase and be ready to bid the project. Points Received: 30 if all three criteria have been met Note: A full environmental review does not have to be finalized however the cross-cutter scoping process must be complete. Plans do not have to be approved by the Division of Water, but they must have been submitted for review. Potential borrowers may be asked to provide proof to substantiate claims.


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III. Summary of Points System Used to Establish Project Priority Ranking

Priority Ranking Criteria Possible Points

A. Project Needs Category

1. Combined Sewer Overflow (CSO) Correction 40

2. Sanitary Sewer Overflow (SSO) Correction 30

3. Replacement or Rehabilitation of Aging Infrastructure, including correction of moderate infiltration and inflow (i.e., no associated SSO).

20

4. New Treatment Plant 10

5. New Collector Sewers and Appurtenances 10

6. Decentralized Wastewater Treatment Systems 20

7. Upgrade to Advanced Treatment 20

8. Rehabilitation/Upgrade/Expansion of Existing Treatment Plant 20

9. New Interceptors and Appurtenances 10

10. Storm Water Control 20

11. Nonpoint Source (NPS) Pollution Control 20

12. Recycled Water Distribution 10

13. Planning 10

14. Other (specify): 10

B. Regionalization

1. Will this project provide regionalization and/or consolidation of wastewater treatment systems? Proposed project reduces the number of NPDES discharges by regionalization.

20

2. Will this project eliminate a package treatment plant that is more than 25 years old?

25

3. Will this project eliminate a package treatment plant that has received notices of violations resulting in degradation of waters of Commonwealth within the last two state fiscal years - July 2014 - June 2016?

25

C. Compliance and Enforcement

1. Is the project necessary to achieve full or partial compliance with a court order, agreed order, or a judicial or administrative consent decree?

50

2. System has not received any Notices of Violation within the previous state fiscal year – July 2015-June 2016

25

D. Water Quality

1. Will the project allow the system to address existing Total Maximum Daily Load (TMDL)?

10

2. Will the project allow the system to address existing or projected nutrient TMDL?

30


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3. Will the project allow the system to address an approved Watershed Management Plan?

10

4. Will the project make reasonable progress towards eliminating identified pollutant sources for waterbodies that appear on the 2010 Integrated Report to Congress on Water Quality in Kentucky?

20 points for each pollutant-waterbody

combination

5. Does the project eliminate existing or potential sources of pollution in groundwater sensitivity areas?

15 points for high or highest sensitivity

10 points for moderate sensitivity

6. Is the project located within an identified SWAPP zone or WHPA? 10 for each Zone 1 7 for each Zone 2 3 for each Zone 3

7. Will the project make reasonable progress towards eliminating identified pollutant sources of water quality impairments within an identified DOW Priority Watershed?

30 points

8. Will the project have a positive effect on Special Use Waters? 10 points

9. Will the project have a positive impact on drinking water sources within a 5-mile radius of its location?

10

10. Will the project eliminate failing on-site septic tanks or straight pipes? 15

E. Financial Need

1. Borrowers with a median household income (MHI) below 80 percent of the State’s MHI as determined by the current American Community Survey (ACS) 5-Year Estimate

20

2. Borrowers with a MHI between 80 and 100 percent of the State’s MHI as determined by the current ACS 5-Year Estimate

10

F. Asset Management

1. System has an Asset Management Program or similar planning document 20

2.

System’s monthly wastewater bill, based on 4,000 gallons, as a percentage of Median Household Income is:

Greater than or equal to 2.0% 10

Between 1 and 1.99% 5

Below 1% 0

3. System has specifically allocated funds for the rehabilitation and replacement of aging and deteriorating infrastructure

10


15

G. Green Projects (See Green Project Reserve Guidance Document)

1.

Green Infrastructure: Green stormwater infrastructure includes a wide array of practices at multiple scales that manage wet weather and that maintains and restores natural hydrology by infiltrating, evapotranspiring and harvesting and using stormwater. On a regional scale, green infrastructure is the preservation and restoration of natural landscape features, such as forests, floodplains, and wetlands, coupled with policies such as infill and redevelopment that reduce overall imperviousness in a watershed. On the local scale, green infrastructure consists of site- and neighborhood-specific practices, such as:

• Implementation of green streets

• Wet Weather management systems for parking areas

• Implementation of comprehensive urban forestry programs

• Stormwater harvesting and reuse

• Downspout disconnection

• Comprehensive retrofit programs designed to keep wet weather

discharges out of sewer systems

• Establishment or restoration of riparian buffers, floodplains, wetlands or

other natural features

• Management of wetlands

• Purchase of land or easements on land that has a direct benefit to water

quality

5 pts. each/10 pts. Maximum

2.

Water Efficiency: The use of improved technologies and practices to deliver equal or better services with less water. Water efficiency encompasses conservation and reuse efforts, as well as water loss reduction and prevention, to protect water resources for the future. Examples include:

• Installing or retrofitting water efficient devices such as plumbing fixtures and appliances (toilets, showerheads, urinals)

• Installing any type of water meter in previously unmetered areas (can include backflow prevention if in conjunction with meter replacement)

• Replacing existing broken/malfunctioning water meters with AMR or smart meters, meters with leak detection, backflow prevention

• Retrofitting/adding AMR capabilities or leak equipment to existing meters

• Developing water audit and conservation plans, which are reasonably expected to result in a capital project

• Recycling and water reuse projects that replace potable sources with non-potable sources (Gray water, condensate, and wastewater effluent reuse systems, extra treatment or distribution costs associated with water reuse)

• Retrofit or replacement of existing landscape irrigation/agricultural systems to more efficient landscape/agricultural irrigation systems (rain and moisture sensing equipment)

• Water meter replacement with traditional water meters *

• Projects that result from a water audit or water conservation plan*

• Storage tank replacement/rehabilitation to reduce water loss*

• New water efficient landscape/agricultural irrigation system, where there currently is not one*

5 pts. each/10 pts. maximum


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3.

Energy Efficiency: Energy efficiency is the use of improved technologies and practices to reduce the energy consumption of water projects, use energy in a more efficient way, and/or produce/utilize renewable energy. Examples include:

• Renewable energy projects such as wind, solar, geothermal, and micro-hydroelectric, and biogas combined heat and power systems that provide power to a POTW

• POTW-owned renewable energy projects

• Collection system infiltration/inflow (I/I) detection equipment

• POTW energy management planning, including energy assessments, energy audits, optimization studies, and sub-metering of individual processes to determine high energy use areas

• Projects that achieve a reduction in energy consumption (pumps, motors)*

• Projects that cost effectively eliminate pumps or pumping stations*

• I/I correction projects that save energy from pumping and reduced treatment costs*

• Replacing old motors with premium energy efficiency motors*

• Upgrade of POTW lighting to energy efficient sources*

• SCADA systems where substantial energy savings can be demonstrated*

• Variable Frequency Drive (VFD) controllers where substantial energy savings can be demonstrated*

10 pts. each

4.

Environmentally Innovative: Environmentally innovative projects include those that demonstrate new and/or innovative approaches to delivering services or managing water resources in a more sustainable way. Examples include:

• Total integrated water resources management planning likely to result in a capital project

• Utility sustainability plan consistent with EPA’s sustainability policy

• Greenhouse gas inventory or mitigation plan and submission of a GHG inventory to a registry as long as it is being done for an SRF eligible facility

• Planning activities by a POTW to prepare for adaption to the long-term affects of climate change and/or extreme weather

• Construction of US Building Council LEED certified buildings, or renovation of an existing building on POTW facilities

• Decentralized wastewater treatment solutions to existing deficient or failing onsite wastewater systems

• Constructed wetlands projects used for municipal wastewater treatment, polishing, and/or effluent disposal*

• Projects that result from total/integrated water resource management planning consistent with the decision criteria for environmentally innovative projects and that are CWSRF eligible*

• Projects that facilitate adaptation of POTWs to climate change identified by a carbon footprint assessment or climate adaption study*

• POTW upgrades or retrofits that remove phosphorus for beneficial use, such as biofuel production with algae*

• Projects that significantly reduce or eliminate the use of chemicals in wastewater treatment*

• Treatment technologies that significantly reduce the volume of residuals, generation of residuals, or lower the amount of chemicals in the residuals*

• Educational activities and demonstration projects for water or energy efficiency*

• Projects that achieve the goals/objectives of utility asset management plans*

• Sub-surface land application of effluent and other means for groundwater recharge, such as spray irrigation and overland flow*

5 pts. each/10 pts. maximum


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H. Project Readiness

1. Borrower has submitted complete technical plans and specifications to the Division of Water; and

30 2.

Borrower has conducted a full environmental review for all components of the project or has completed the cross-cutter scoping process (including eClearinghouse, US Fish and Wildlife service, National Resource Conservation Service, and US Army Corps of Engineers reviews); and

3. Borrower has received funding commitments from other funding sources, where applicable

*Denotes that a business case may be required.

IV. Developing and Updating the Project Priority List and Intended Use Plan In order for a project to be considered for funding from the CWSRF, it must appear on the Comprehensive Project Priority List for the state fiscal year in which the project will receive a binding commitment. To be included in this list, an eligible project applicant must complete or update a Project Profile (and related mapping) in the Water Resource Information System (WRIS) through the Area Development District (ADD). Once the project is submitted for CWSRF funding, DOW staff will evaluate the project based on the ranking system discussed above and assign the project a numeric score. Eligible projects will then be added to the next Comprehensive Project Priority List. In the event of a tie, the following factors will be utilized to priority rank each project: (1) service of a small system as defined by population; (2) projects with existing enforcement actions (i.e. Agreed Orders, Consent Decrees); (3) water quality impacts; and (4) financial need as evident by the median household income of the applicant. If the project is only for accommodating future growth and will not address an existing water quality or public health need, and therefore does not receive any points from the above criteria, the project will be still included on the Comprehensive Project Priority List if it is eligible for CWSRF funding.

DOW and the Kentucky Infrastructure Authority (KIA) will prepare an annual Intended Use Plan (IUP) that will describe how the state intends to use the funds in the Kentucky CWSRF for each state fiscal year, and how those uses support the objectives of the CWA. DOW will publish and maintain the IUP and Project Priority List on its CWSRF website. Each IUP will include an updated Comprehensive Project Priority List and a Fundable List of projects that are anticipated to receive funding during that state fiscal year. Once the IUP has been drafted, notice will be given to the public that the draft IUP is available for review and comment for a period of at least 30 days. After the comment period has ended DOW and KIA will review any comments received and make changes to the IUP as appropriate. Both the draft and final IUPs will be available on DOW’s CWSRF website. http://water.ky.gov/Funding/Pages/CleanWaterStateRevolvingFund.aspx

V. Eligible Project Applicants/Projects Any governmental agency shall be eligible to apply for financial assistance for planning, design and construction of eligible projects. Any project that triggers the requirement of 401 KAR 5:006 wastewater planning regulation to submit a facility plan will be eligible for planning and design loan only.


18

VI. References Kentucky Division of Water website: http://water.ky.gov/Pages/default.aspx Kentucky Division of Water CWSRF website: http://water.ky.gov/Funding/Pages/CleanWaterStateRevolvingFund.aspx Kentucky Infrastructure Authority website: http://kia.ky.gov/ U.S. EPA 2010 website: http://www.epa.gov/waterinfrastructure/


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VII. Kentucky Division of Water State Priority Watersheds

HUC Watershed River Basin

05110001150 Bacon Creek Green and Tradewater

05100101290 Banklick Creek Licking

05140101250 Beargrass Creek, St. Matthews Salt

05110001090 Big Pitman Creek Green and Tradewater

05140104250030 Boiling Springs Salt

05090201130 Cabin Creek Licking

05100205280200 Cane Run Kentucky

06040006040 Clarks River Four Rivers

05100205190 Clarks Run Kentucky

05130101330 Clear Fork, Cumberland River Upper Cumberland

05130101330 Clear Fork, Cumberland River Upper Cumberland

05130101055 Clover Fork, Cumberland River Upper Cumberland

05100205170 Dix River, Herrington Lake Kentucky

05100205410 Eagle Creek mouth Kentucky

05130101350 Elk Fork Creek Upper Cumberland

05070202060290 Elkhorn Creek, near Pine Mountain Big, Little Sandy and Tygarts

05100101200 Fleming Creek Licking

05140102180 Floyds Fork Salt

05140102190 Floyds Fork Salt

05100205180 Hanging Fork Creek Kentucky

05070202020 Jonican Branch, near Fish Trap Lake Big, Little Sandy and Tygarts

05130101450 Laurel River Upper Cumberland

05070203170 Levisa Fork, near Louisa Big, Little Sandy and Tygarts

05100101010 Licking River, headwaters Licking

08010201010 Mayfield Creek Four Rivers

05130101340 Mud Creek Upper Cumberland

05100205020 Muddy Creek Kentucky

00005100201 North Fork Kentucky River Kentucky

05130206090010 Pleasant Grove Creek Four Rivers

05070203040 Prater Creek, near Banner Big, Little Sandy and Tygarts

05100204120 Red River Gorge Kentucky

05140104250 Sinking Creek, at Hardinsburg Salt

05130102090 Sinking Creek, of Rockcastle River Upper Cumberland

05100205270 South Elkhorn Creek Kentucky

05130205180 South Fork Little River Four Rivers

05100102030 Strodes Creek Licking

05100102050 Townsend Creek Licking

05110002220 West Fork Drakes Creek Green and Tradewater

05130206230 West Fork Red River Four Rivers

05130206150 Whippoorwill Creek Four Rivers


20

VIII. 319h Funded Watershed-Based Plans in Kentucky Current 319(h) Funded Watershed-Based Plans in Kentucky

Project Year

Watershed Name Basin Size of Watershed (sq. miles)

Completion Date

2002 Dix River/Herrington Reservoir Applies to Clark's Run and Hanging Fork Subwatersheds

Kentucky 28.5 / 96.5 Accepted November 2009

2002 Cane Creek Four Rivers 26 Inactive*

2002 Upper East Fork Clarks River Four Rivers 48 Accepted March 2010

2003 Floyds Fork Salt 284 Inactive*

2004 Corbin City/Laurel River Upper Cumberland

200.5 Accepted May 2007

2004 Darby Creek of Harrods Creek

Salt 10.4 Inactive*

2004 Dry Creek of Triplett Creek Licking 11.5 Accepted May 2010

2004 Town Branch (Stockton Creek) of Fleming Creek

Licking 5.9 Accepted June 2010

2004 Hancock Creek of Strodes Creek

Licking 12.9 Accepted June 2010

2005 Bacon Creek Green 90.5 Accepted March 2011

2005 Pleasant Grove Creek Four Rivers 34 Inactive*

2005 Ten Mile Creek of Eagle Creek Kentucky 10.5 Accepted Nov 2005

2005 Pleasant Run Green 13 Accepted Dec 2005

2005 Benson Creek (Goose Creek) Kentucky 107 (10.27)

Inactive*

2006 Curry's Fork Salt 28.5 Accepted March 2012

2006 Three sub-watersheds of Big South Fork: Bear Creek, Roaring Paunch, Big Creek

Upper Cumberland

155.5 Provisional Acceptance Oct 2012

2006 Cane Run Kentucky 24.7 Accepted Oct 2011

2006 Rock Creek Upper Cumberland

13.2 Accepted April 2008

2007 Banklick Creek Licking 58 Accepted May 2010

2007 Elkhorn Creek Big Sandy 53 Inactive*

2008 Triplett Creek Licking 180 Expected Completion Dec 2013

2008 Hinkston Creek Licking 260 Accepted July 2011

2009 Red River Kentucky 105 Expected Completion Dec 2013

2009 Gunpowder Creek Licking 58 Expected Completion Dec 2013


21

2009 Wolf Run Kentucky 10 Accepted March 2013

2010 Woolper Creek Licking 33 Expected Completion Oct 2014

2010 Brushy Creek Upper Cumberland

44 Expected Completion Dec 2013

2011 Sinking Creek Upper Cumberland

34 Expected Completion Dec 2015

2011 Kinniconick Creek Licking 23 Expected Completion Dec 2015

* Inactive - Partial plan completed but not accepted by Kentucky Division of Water

48

APPENDIX D

GREEN RESERVE GUIDANCE

4/21/2010 PART A - CWSRF 3

PART A – CWSRF GPR SPECIFIC GUIDANCE

CWSRF Eligibility Principles

State SRF programs are responsible for identifying projects that count toward GPR. The

following overarching principles, or decision criteria, apply to all projects that count

toward GPR and will help states identify projects.

0.1 All GPR projects must otherwise be eligible for CWSRF funding. The GPR requirement

does not create new funding authority beyond that described in Title VI of the CWA.

Consequently, a subset of 212, 319 and 320 projects will count towards the GPR. The

principles guiding CWSRF funding eligibility include:

0.2 All Sec 212 projects must be consistent with the definition of “treatment works” as set forth

in section 212 of the Clean Water Act (CWA).

0.2-1 All section 212 projects must be publicly owned, as required by CWA section

603(c)(1).

0.2-2 All section 212 projects must serve a public purpose.

0.2-3 POTWs as a whole are utilized to protect or restore water quality. Not all portions

of the POTW have a direct water quality impact in and of themselves (i.e. security

fencing). Consequently, POTW projects are not required to have a direct water

quality benefit, though most of them will.

0.3 Eligible nonpoint source projects implement a nonpoint source management program under

an approved section 319 plan or the nine element watershed plans required by the 319

program.

0.3-1 Projects prevent or remediate nonpoint source pollution.

0.3-2 Projects can be either publicly or privately owned and can serve either public or

private purposes. For instance, it is acceptable to fund land conservation activities

that preserve the water quality of a drinking water source, which represents a public

purpose project. It is also acceptable to fund agricultural BMPs that reduce

nonpoint source pollution, but also improve the profitability of the agricultural

operation. Profitability is an example of a private purpose.

0.3-3 Eligible costs are limited to planning, design and building of capital water quality

projects. The CWSRF considers planting trees and shrubs, purchasing equipment,

environmental cleanups and the development and initial delivery of education

programs as capital water quality projects. Daily maintenance and operations, such

as expenses and salaries are not considered capital costs.

0.3-4 Projects must have a direct water quality benefit. Implementation of a water quality

project should, in itself, protect or improve water quality. States should be able to

estimate the quantitative and/or qualitative water quality benefit of a nonpoint

source project.

0.3-5 Only the portions of a project that remediate, mitigate the impacts of, or prevent

water pollution or aquatic or riparian habitat degradation should be funded. Where

water quantity projects improve water quality (e.g. reduction of flows from

impervious surfaces that adversely affect stream health, or the modification of

irrigation systems to reduce runoff and leachate from irrigated lands), they would be

4/21/2010 PART A - CWSRF 4

considered to have a water quality benefit. In many cases, water quality protection

is combined with other elements of an overall project. For instance, brownfield

revitalization projects include not only water quality assessment and cleanup

elements, but often a redevelopment element as well. Where the water quality

portion of a project is clearly distinct from other portions of the project, only the

water quality portion can be funded by the CWSRF.

0.3-6 Point source solutions to nonpoint source problems are eligible as CWSRF

nonpoint source projects. Section 319 Nonpoint Source Management Plans identify

sources of nonpoint source pollution. In some cases, the most environmentally and

financially desirable solution has point source characteristics and requires an

NPDES discharge permit. For instance, a septage treatment facility may be crucial

to the proper maintenance and subsequent functioning of decentralized wastewater

systems. Without the septage treatment facility, decentralized systems are less

likely to be pumped, resulting in malfunctioning septic tanks.

0.4 Eligible projects under section 320 implement an approved section 320 Comprehensive

Conservation Management Plan (CCMP).

0.4-1 Section 320 projects can be either publicly or privately owned.

0.4-2 Eligible costs are limited to capital costs.

0.4-3 Projects must have a direct benefit to the water quality of an estuary. This includes

protection of public water supplies and the protection and propagation of a

balanced, indigenous population of shellfish, fish, and wildlife, and allows

recreational activities, in and on water, and requires the control of point and

nonpoint sources of pollution to supplement existing controls of pollution.

0.4-4 Only the portions of a project that remediate, mitigate the impacts of, or prevent

water pollution in the estuary watershed should be funded.

0.5 GPR projects must meet the definition of one of the four GPR categories. The Individual

GPR categories do not create new eligibility for the CWSRF. The projects that count toward

GPR must otherwise be eligible for CWSRF funding.1

0.6 GPR projects must further the goals of the Clean Water Act.

1 Drinking Water Utilities can apply for CWSRF funding

4/21/2010 PART A - CWSRF 5

CWSRF Technical Guidance

The following sections outline the technical aspects for the CWSRF Green Project Reserve.

It is organized by the four categories of green projects: green infrastructure, water

efficiency, energy efficiency, and environmentally innovative activities. Categorically green

projects are listed, as well as projects that are ineligible. Design criteria for business cases

and example projects that would require a business case are also provided.

1.0 GREEN INFRASTRUCUTRE

1.1 Definition: Green stormwater infrastructure includes a wide array of practices at multiple scales

that manage wet weather and that maintain and restore natural hydrology by infiltrating,

evapotranspiring and harvesting and using stormwater. On a regional scale, green infrastructure is

the preservation and restoration of natural landscape features, such as forests, floodplains and

wetlands, coupled with policies such as infill and redevelopment that reduce overall imperviousness

in a watershed. On the local scale green infrastructure consists of site- and neighborhood-specific

practices, such as bioretention, trees, green roofs, permeable pavements and cisterns.

1.2 Categorical Projects

1.2-1 Implementation of green streets (combinations of green infrastructure practices in

transportation rights-of-ways), for either new development, redevelopment or retrofits

including: permeable pavement2, bioretention, trees, green roofs, and other practices

such as constructed wetlands that can be designed to mimic natural hydrology and

reduce effective imperviousness at one or more scales. Vactor trucks and other capital

equipment necessary to maintain green infrastructure projects.

1.2-2 Wet weather management systems for parking areas including: permeable pavement2,

bioretention, trees, green roofs, and other practices such as constructed wetlands that

can be designed to mimic natural hydrology and reduce effective imperviousness at one

or more scales. Vactor trucks and other capital equipment necessary to maintain green

infrastructure projects.

1.2-3 Implementation of comprehensive street tree or urban forestry programs, including

expansion of tree boxes to manage additional stormwater and enhance tree health.

1.2-4 Stormwater harvesting and reuse projects, such as cisterns and the systems that allow

for utilization of harvested stormwater, including pipes to distribute stormwater for

reuse.

1.2-5 Downspout disconnection to remove stormwater from sanitary, combined sewers and

separate storm sewers and manage runoff onsite.

1.2-6 Comprehensive retrofit programs designed to keep wet weather discharges out of all

types of sewer systems using green infrastructure technologies and approaches such as

green roofs, green walls, trees and urban reforestation, permeable pavements and

bioretention cells, and turf removal and replacement with native vegetation or trees

that improve permeability. 1.2-7 Establishment or restoration of permanent riparian buffers, floodplains, wetlands and

other natural features, including vegetated buffers or soft bioengineered stream banks.

2 The total capital cost of permeable pavement is eligible, not just the incremental additional cost when compared to

impervious pavement.

4/21/2010 PART A - CWSRF 6

This includes stream day lighting that removes natural streams from artificial pipes and

restores a natural stream morphology that is capable of accommodating a range of

hydrologic conditions while also providing biological integrity. In highly urbanized

watersheds this may not be the original hydrology.

1.2-8 Projects that involve the management of wetlands to improve water quality and/or

support green infrastructure efforts (e.g., flood attenuation).3

1.2-8a Includes constructed wetlands.

1.2-8b May include natural or restored wetlands if the wetland and its multiple

functions are not degraded and all permit requirements are met. 1.2-9 The water quality portion of projects that employ development and redevelopment

practices that preserve or restore site hydrologic processes through sustainable

landscaping and site design.

1.2-10 Fee simple purchase of land or easements on land that has a direct benefit to water

quality, such as riparian and wetland protection or restoration.

1.3 Projects That Do Not Meet the Definition of Green Infrastructure

1.3-1 Stormwater controls that have impervious or semi-impervious liners and provide no

compensatory evapotranspirative or harvesting function for stormwater retention. 1.3-2 Stormwater ponds that serve an extended detention function and/or extended

filtration. This includes dirt lined detention basins.

1.3-3 In-line and end-of-pipe treatment systems that only filter or detain stormwater.

1.3-4 Underground stormwater control and treatment devices such as swirl concentrators,

hydrodynamic separators, baffle systems for grit, trash removal/floatables, oil and

grease, inflatable booms and dams for in-line underground storage and diversion of

flows.

1.3-5 Stormwater conveyance systems that are not soil/vegetation based (swales) such as

pipes and concrete channels. Green infrastructure projects that include pipes to collect

stormwater may be justified as innovative environmental projects pursuant to Section

4.4 of this guidance. 1.3-6 Hardening, channelizing or straightening streams and/or stream banks.

1.3-7 Street sweepers, sewer cleaners, and vactor trucks unless they support green

infrastructure projects.

1.4 Decision Criteria for Business Cases

1.4-1 Green infrastructure projects are designed to mimic the natural hydrologic

conditions of the site or watershed.

1.4-2 Projects that capture, treat, infiltrate, or evapotranspire water on the parcels where it

falls and does not result in interbasin transfers of water.

1.4-3 GPR project is in lieu of or to supplement municipal hard/gray infrastructure.

1.4-4 Projects considering both landscape and site scale will be most successful at

protecting water quality.

3 Wetlands are those areas that are inundated or saturated by surface or groundwater at a frequency and duration

sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically

adapted for life in saturated soil conditions. Wetlands generally include swamps, marshes, bogs, vernal

pools, and similar areas.

4/21/2010 PART A - CWSRF 7

1.4-5 Design criteria are available at:

http://cfpub.epa.gov/npdes/greeninfrastructure/munichandbook.cfm and

http://cfpub.epa.gov/npdes/greeninfrastructure/technology.cfm and

1.5 Examples of Projects Requiring A Business Case

1.5-1 Fencing to keep livestock out of streams and stream buffers. Fencing must allow

buffer vegetation to grow undisturbed and be placed a sufficient distance from the

riparian edge for the buffer to function as a filter for sediment, nutrients and other

pollutants.

2.0 WATER EFFICIENCY

2.1 Definition: EPA‟s WaterSense program defines water efficiency as the use of improved

technologies and practices to deliver equal or better services with less water. Water efficiency

encompasses conservation and reuse efforts, as well as water loss reduction and prevention, to

protect water resources for the future.


2.2-1 Installing or retrofitting water efficient devices, such as plumbing fixtures and

appliances

2.2-1a For example -- shower heads, toilets, urinals and other plumbing devices

2.2-1b Where specifications exist, WaterSense labeled products should be the

preferred choice (http://www.epa.gov/watersense/index.html).

2.2-1c Implementation of incentive programs to conserve water such as rebates.

2.2-2 Installing any type of water meter in previously unmetered areas

2.2-2a If rate structures are based on metered use

2.2-2b Can include backflow prevention devices if installed in conjunction with

water meter

2.2-3 Replacing existing broken/malfunctioning water meters, or upgrading existing

meters, with:

2.2-3a Automatic meter reading systems (AMR), for example:

2.2-3a(i) Advanced metering infrastructure (AMI)

2.2-3a(ii) Smart meters

2.2-3b Meters with built in leak detection

2.2-3c Can include backflow prevention devices if installed in conjunction with

water meter replacement

2.2-4 Retrofitting/adding AMR capabilities or leak detection equipment to existing

meters (not replacing the meter itself).

2.2-5 Water audit and water conservation plans, which are reasonably expected to result in

a capital project.

2.2-6 Recycling and water reuse projects that replace potable sources with non-potable

sources,

2.2-6a Gray water, condensate and wastewater effluent reuse systems (where local

codes allow the practice) 2.2-6b Extra treatment costs and distribution pipes associated with water reuse.

2.2-7 Retrofit or replacement of existing landscape irrigation systems to more efficient

landscape irrigation systems, including moisture and rain sensing controllers.

http://cfpub.epa.gov/npdes/greeninfrastructure/munichandbook.cfm

http://cfpub.epa.gov/npdes/greeninfrastructure/technology.cfm

http://www.epa.gov/watersense/index.html

4/21/2010 PART A - CWSRF 8

2.2-8 Retrofit or replacement of existing agricultural irrigation systems to more efficient

agricultural irrigation systems.

2.3 Projects That Do Not Meet the Definition of Water Efficiency

2.3-1 Agricultural flood irrigation.

2.3-2 Lining of canals to reduce water loss.

2.3-3 Replacing drinking water distribution lines. This activity extends beyond CWSRF

eligibility and is more appropriately funded by the DWSRF.

2.3-4 Leak detection equipment for drinking water distribution systems, unless used for

reuse distribution pipes.


2.4-1 Water efficiency can be accomplished through water saving elements or reducing

water consumption. This will reduce the amount of water taken out of rivers, lakes,

streams, groundwater, or from other sources.

2.4-2 Water efficiency projects should deliver equal or better services with less net water

use as compared to traditional or standard technologies and practices

2.4-3 Efficient water use often has the added benefit of reducing the amount of energy

required by a POTW, since less water would need to be collected and treated;

therefore, there are also energy and financial savings.

2.5 Examples of Projects Requiring a Business Case.

2.5-1 Water meter replacement with traditional water meters (see AWWA M6 Water

Meters – Selection Installation, Testing, and Maintenance).

2.5-2 Projects that result from a water audit or water conservation plan

2.5-3 Storage tank replacement/rehabilitation to reduce loss of reclaimed water.

2.5-4 New water efficient landscape irrigation system.

2.5-5 New water efficient agricultural irrigation system.

3.0 ENERGY EFFICIENCY

3.1 Definition: Energy efficiency is the use of improved technologies and practices to reduce the

energy consumption of water quality projects, use energy in a more efficient way, and/or

produce/utilize renewable energy.


3.2-1 Renewable energy projects such as wind, solar, geothermal, micro-hydroelectric, and

biogas combined heat and power systems (CHP) that provide power to a POTW.

(http:///www.epa.gov/cleanenergy). Micro-hydroelectric projects involve capturing

the energy from pipe flow.

3.2-1a POTW owned renewable energy projects can be located onsite or offsite.

3.2-1b Includes the portion of a publicly owned renewable energy project that

serves POTW‟s energy needs.

3.2-1c Must feed into the grid that the utility draws from and/or there is a direct

connection.

http://www.epa.gov/cleanenergy

4/21/2010 PART A - CWSRF 9

3.2-2 Projects that achieve a 20% reduction in energy consumption are categorically

eligible for GPR4. Retrofit projects should compare energy used by the existing

system or unit process5 to the proposed project. The energy used by the existing

system should be based on name plate data when the system was first installed,

recognizing that the old system is currently operating at a lower overall efficiency

than at the time of installation. New POTW projects or capacity expansion projects

should be designed to maximize energy efficiency and should select high efficiency

premium motors and equipment where cost effective. Estimation of the energy

efficiency is necessary for the project to be counted toward GPR. If a project

achieves less than a 20% reduction in energy efficiency, then it may be justified

using a business case.

3.2-3 Collection system Infiltration/Inflow (I/I) detection equipment

3.2-4 POTW energy management planning, including energy assessments, energy audits,

optimization studies, and sub-metering of individual processes to determine high

energy use areas, which are reasonably expected to result in a capital project are

eligible. Guidance to help POTWs develop energy management programs,

including assessments and audits is available at

http://www.epa.gov/waterinfrastructure/pdfs/guidebook_si_energymanagement.pdf.

3.3 Projects That Do Not Meet the Definition of Energy Efficiency

3.3-1 Renewable energy generation that is privately owned or the portion of a publicly

owned renewable energy facility that does not provide power to a POTW, either

through a connection to the grid that the utility draws from and/or a direct

connection to the POTW.

3.3-2 Simply replacing a pump, or other piece of equipment, because it is at the end of its

useful life, with something of average efficiency.

3.3-3 Facultative lagoons, even if integral to an innovative treatment process.

3.3-4 Hydroelectric facilities, except micro-hydroelectric projects. Micro-hydroelectric

projects involve capturing the energy from pipe flow.


3.4-1 Project must be cost effective. An evaluation must identify energy savings and

payback on capital and operation and maintenance costs that does not exceed the

useful life of the asset.

http://www.epa.gov/waterinfrastructure/pdfs/guidebook_si_energymanagement.pdf

3.4-2 The business case must describe how the project maximizes energy saving

opportunities for the POTW or unit process.

3.4-3 Using existing tools such as Energy Star‟s Portfolio Manager

(http://www.energystar.gov/index.cfm?c=evaluate_performance.bus_portfoliomana

4 The 20% threshold for categorically eligible CWSRF energy efficiency projects was derived from a 2002

Department of Energy study entitled United States Industrial Electric Motor Systems Market Opportunities

Assessment, December 2002 and adopted by the Consortium for Energy Efficiency. Further field studies conducted

by Wisconsin Focus on Energy and other States programs support the threshold. 5 A unit process is a portion of the wastewater system such as the collection system, pumping stations, aeration

system, or solids handling, etc.



http://www.energystar.gov/index.cfm?c=evaluate_performance.bus_portfoliomanager

http://www.energystar.gov/index.cfm?c=evaluate_performance.bus_portfoliomanager

4/21/2010 PART A - CWSRF 10

ger) or Check Up Program for Small Systems (CUPSS) (http://www.epa/cupss) to

document current energy usage and track anticipated savings.

3.5 Examples of Projects Requiring a Business Case

3.5-1 POTW projects or unit process projects that achieve less than a 20% energy

efficiency improvement.

3.5-2 Projects implementing recommendations from an energy audit that are not

otherwise designated as categorical.

3.5-3 Projects that cost effectively eliminate pumps or pumping stations.

3.5-4 Infiltration/Inflow (I/I) correction projects that save energy from pumping and

reduced treatment costs and are cost effective.

3.5-4a Projects that count toward GPR cannot build new structural capacity. These

projects may, however, recover existing capacity by reducing flow from I/I.

3.5-5 I/I correction projects where excessive groundwater infiltration is contaminating the

influent requiring otherwise unnecessary treatment processes (i.e. arsenic laden

groundwater) and I/I correction is cost effective.

3.5-6 Replacing pre-Energy Policy Act of 1992 motors with National Electric

Manufacturers Association (NEMA) premium energy efficiency motors.

3.5-8a NEMA is a standards setting association for the electrical manufacturing

industry (http://www.nema.org/gov/energy/efficiency/premium/).

3.5-7 Upgrade of POTW lighting to energy efficient sources such as metal halide pulse

start technologies, compact fluorescent, light emitting diode (LED).

3.5-8 SCADA systems can be justified based upon substantial energy savings.

3.5-9Variable Frequency Drive can be justified based upon substantial energy savings.

4.0 ENVIRONMENTALLY INNOVATIVE

4.1 Definition: Environmentally innovative projects include those that demonstrate new and/or

innovative approaches to delivering services or managing water resources in a more sustainable way.


4.2-1 Total/integrated water resources management planning likely to result in a capital

project. 4.2-2 Utility Sustainability Plan consistent with EPA‟s SRF sustainability policy. 4.2-3 Greenhouse gas (GHG) inventory or mitigation plan and submission of a GHG

inventory to a registry (such as Climate Leaders or Climate Registry)

4.3-3a Note: GHG Inventory and mitigation plan is eligible for CWSRF funding.

4.2-3b EPA Climate Leaders: http://www.epa.gov/climateleaders/basic/index.html

Climate Registry: http://www.theclimateregistry.org/

4.2-4 Planning activities by a POTW to prepare for adaptation to the long-term effects of

climate change and/or extreme weather.

4.2-4a Office of Water – Climate Change and Water website:

http://www.epa.gov/water/climatechange/

4.2.5 Construction of US Building Council LEED certified buildings or renovation of an

existing building on POTW facilities.

4.2-5a Any level of certification (Platinum, Gold, Silver, Certified).

http://www.epa/cupss

http://www.nema.org/gov/energy/efficiency/premium/

http://www.epa.gov/climateleaders/basic/index.html

http://www.theclimateregistry.org/

http://www.epa.gov/water/climatechange/

4/21/2010 PART A - CWSRF 11

4.2-5b All building costs are eligible, not just stormwater, water efficiency and

energy efficiency related costs. Costs are not limited to the incremental

additional costs associated with LEED certified buildings.

4.2-5c U.S. Green Building Council website

http://www.usgbc.org/displaypage.aspx?CategoryID=19

4.2-6 Decentralized wastewater treatment solutions to existing deficient or failing onsite

wastewater systems.

4.2-6a Decentralized wastewater systems include individual onsite and/or cluster

wastewater systems used to collect, treat and disperse relatively small

volumes of wastewater. An individual onsite wastewater treatment system

is a system relying on natural processes and/or mechanical components,

that is used to collect, treat and disperse or reclaim wastewater from a

single dwelling or building. A cluster system is a wastewater collection and

treatment system under some form of common ownership that collects

wastewater from two or more dwellings or buildings and conveys it to a

treatment and dispersal system located on a suitable site near the dwellings

or buildings. Decentralized projects may include a combination of these

systems. EPA recommends that decentralized systems be managed under a

central management entity with enforceable program requirements, as

stated in the EPA Voluntary Management Guidelines.

http://www.epa.gov/owm/septic/pubs/septic_guidelines.pdf

4.2-6b Treatment and Collection Options: A variety of treatment and collection

options are available when implementing decentralized wastewater systems. They

typically include a septic tank, although many configurations include additional

treatment components following or in place of the septic tank, which provide for

advanced treatment solutions. Most disperse treated effluent to the soil where further

treatment occurs, utilizing either conventional soil absorption fields or alternative soil

dispersal methods which provide advanced treatment. Those that discharge to

streams, lakes, tributaries, and other water bodies require federal or state discharge

permits (see below). Some systems promote water reuse/recycling, evaporation or

wastewater uptake by plants. Some decentralized systems, particularly cluster or

community systems, often utilize alternative methods of collection with small

diameter pipes which can flow via gravity, pump, or siphon, including pressure

sewers, vacuum sewers and small diameter gravity sewers. Alternative collection

systems generally utilize piping that is less than 8 inches in diameter, or the minimum

diameter allowed by the state if greater than 8 inches, with shallow burial and do not

require manholes or lift stations. Septic tanks are typically installed at each building

served or another location upstream of the final treatment and dispersal site.

Collection systems can transport raw sewage or septic tank effluent. Another popular

dispersal option used today is subsurface drip infiltration. Package plants that

discharge to the soil are generally considered decentralized, depending on the

situation in which they are used. While not entirely inclusive, information on

treatment and collection processes is described, in detail, in the “Onsite Wastewater

Treatment Technology Fact Sheets” section of the EPA Onsite Manual

http://www.epa.gov/owm/septic/pubs/septic_2002_osdm_all.pdf and on EPA‟s septic

system website under Technology Fact Sheets.

http://cfpub.epa.gov/owm/septic/septic.cfm?page_id=283

http://www.usgbc.org/displaypage.aspx?CategoryID=19

http://www.epa.gov/owm/septic/pubs/septic_guidelines.pdf

http://www.epa.gov/owm/septic/pubs/septic_2002_osdm_all.pdf

http://cfpub.epa.gov/owm/septic/septic.cfm?page_id=283

4/21/2010 PART A - CWSRF 12

4.3 Projects That Do Not Meet the Definition of Environmentally Innovative

4.3-1 Air scrubbers to prevent nonpoint source deposition. 4.3-2 Facultative lagoons, even if integral to an innovative treatment processes. 4.3-3 Surface discharging decentralized wastewater systems where there are cost effective

soil-based alternatives.

4.3-4 Higher sea walls to protect POTW from sea level rise.

4.3-5 Reflective roofs at POTW to combat heat island effect.


4.4-1 State programs are allowed flexibility in determining what projects qualify as

innovative in their state based on unique geographical or climatological conditions.

4.4-1a Technology or approach whose performance is expected to address water

quality but the actual performance has not been demonstrated in the state;

4.4-1b Technology or approach that is not widely used in the State, but does

perform as well or better than conventional technology/approaches at lower

cost; or

4.4-1c Conventional technology or approaches that are used in a new application in

the State.

4.5 Examples of Projects Requiring a Business Case 4.5-1Constructed wetlands projects used for municipal wastewater treatment, polishing,

and/or effluent disposal.

4.5-1a Natural wetlands, as well as the restoration/enhancement of degraded

wetlands, may not be used for wastewater treatment purposes and must

comply with all regulatory/permitting requirements.

4.5-1b Projects may not (further) degrade natural wetlands.

4.5-2 Projects or components of projects that result from total/integrated water resource

management planning consistent with the decision criteria for environmentally

innovative projects and that are Clean Water SRF eligible. 4.5-3 Projects that facilitate adaptation of POTWs to climate change identified by a carbon

footprint assessment or climate adaptation study.

4.5-4 POTW upgrades or retrofits that remove phosphorus for beneficial use, such as biofuel

production with algae.

4.5-5 Application of innovative treatment technologies or systems that improve

environmental conditions and are consistent with the Decision Criteria for

environmentally innovative projects such as:

4.5-5a Projects that significantly reduce or eliminate the use of chemicals in

wastewater treatment;

4.5-5b Treatment technologies or approaches that significantly reduce the volume

of residuals, minimize the generation of residuals, or lower the amount of

chemicals in the residuals. (National Biosolids Partnership, 2010; Advances

in Solids Reduction Processes at Wastewater Treatment Facilities Webinar;

http://www.e-wef.org/timssnet/meetings/tnt_meetings.cfm?primary_id=10

WCAP2&Action=LONG&subsystem=ORD%3cbr).

4.5-5b(i) Includes composting, class A and other sustainable biolsolids

management approaches.

4.5-6 Educational activities and demonstration projects for water or energy efficiency.

http://www.e-wef.org/timssnet/meetings/tnt_meetings.cfm?primary_id=10

4/21/2010 PART A - CWSRF 13

4.5-7 Projects that achieve the goals/objectives of utility asset management plans

(http://www.epa.gov/safewater/smallsystems/pdfs/guide_smallsystems_assetmana

gement_bestpractices.pdf; http://www.epa.gov/owm/assetmanage/index.htm).

4.5-8 Sub-surface land application of effluent and other means for ground water recharge,

such as spray irrigation and overland flow.

4.5-8a Spray irrigation and overland flow of effluent is not eligible for GPR

where there is no other cost effective alternative.

Business Case Development

This guidance is intended to be comprehensive: however, EPA understands our examples

projects requiring a business case may not be all inclusive. A business case is a due

diligence document. For those projects, or portions of projects, which are not included in

the categorical projects lists provided above, a business case will be required to

demonstrate that an assistance recipient has thoroughly researched anticipated ‘green’

benefits of a project. Business cases will be approved by the State (see section III.A. in the

Procedures for Implementing Certain Provisions of EPA’s Fiscal Year 2010 Appropriation

Affecting the Clean Water and Drinking Water State Revolving Fund Programs). An

approved business case must be included in the State’s project files and contain clear

documentation that the project achieves identifiable and substantial benefits. The following

sections provide guidelines for business case development.

5.0 Length of a Business Case

5.0-1 Business cases must address the decision criteria for the category of project

5.0-2 Business cases should be adequate, but not exhaustive.

5.0-2a There are many formats and approaches. EPA does not require any specific

one.

5.0-2b Some projects will require detailed analysis and calculations, while others

many not require more than one page.

5.0-2c Limit the information contained in the business case to only the pertinent

„green‟ information needed to justify the project.

5.0-3 A business case can simply summarize results from, and then cite, existing

documentation – such as engineering reports, water or energy audits, results of

water system tests, etc.

5.1 Content of a Business Case

5.1-1 Quantifiable water and/or energy savings or water loss reduction for water and

energy efficiency projects should be included.

5.1-2 The cost and financial benefit of the project should be included, along with the

payback time period where applicable. (NOTE: Clean Water SRF requires energy

efficiency projects to be cost effective.)

5.2 Items Which Strengthen Business Case, but Are Not Required

5.2-1 Showing that the project was designed to enable equipment to operate most

efficiently.

http://www.epa.gov/safewater/smallsystems/pdfs/guide_smallsystems_assetmanagement_bestpractices.pdf



http://www.epa.gov/owm/assetmanage/index.htm

64

APPENDIX E

PUBLIC COMMENTS

2018 Clean Water State Revolving Fund Intended Use Plan Public Comments

Summary of Comments Received During the Public Comment Period

Verbal Comment 1: From: Bryan Kirby CEDA, Inc.

Mr. Kirby requested that KIA consider a process to notify entities on the Project Priority List when they are being bypassed.

Response:

KIA implemented a notification process whereby applicants will be notified of their bypass status on both the DWRSF and CWSRF Project Priority Lists.

Written Comment 1: From: Bryan Kirby

CEDA, Inc.

Mr. Kirby requested that KIA explain the multi-year commitment to the Lexington-Fayette Urban County Government and the impact of SRF loan funds upon non-urban areas of need.

Response:

For the CWSRF program (Fund A) and DWSRF program (Fund F) KIA funds projects based upon the priority system. KIA may impose limitations on borrowers that have outstanding loan balances or loan commitments that increase the concentration risk for the total KIA loan portfolio. The Lexington-Fayette Urban County Government project, as well as the Prestonsburg City Utilities project fall into this category. Funding invitations will contain an invited loan amount based upon available budget information to ensure that the portfolio is safeguarded and that funding can be extended to other projects on the priority list. During the application process the budgets will be re-evaluated for project draws during construction. Funding may be amended to accommodate expected needs. After a project is initially funded by KIA, it may receive priority funding from each available funding source, during subsequent funding cycles, based on funding limits, safeguard of the KIA loan portfolio, and the original project budget amount. This minimizes the uncertainty for some borrowers about the future availability of additional project funds.

Non-urban areas of need are not specifically addressed separately because the published priority system is designed to address Kentucky’s environmental priorities regardless of location.

Written Comment 2: From: Ted Chisholm LaGrange Utility Commission

Mr. Chisholm provided a written statement requesting that KIA include their “Pump Stations and Interceptor Sewer Upgrade Project” listed as project SX21185059 in the 2018 CWSRF Project Priority List. The project was not on the Priority List released in the Draft Intended Use Plan due to a technical error.

Response:

KIA investigated the reason that the project was not submitted for funding and allowed the City of LaGrange F/B/O the LaGrange Utility Commission to submit a Project Profile to be scored and ranked.

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